Latam Brasil Faces Difficulties Negotiating Leasing Contracts and May Lose Planes

At least 13 aircraft operated by the airline in Brazil are blocked due to default

São Paulo

Despite leaving the Brazilian branch out of its request for judicial reorganization in the United States, Latam has struggled to renegotiate aircraft lease contracts that operate routes in Brazil.

Within Brazil, the company might have to return at least 13 planes to lessors. Currently, of the 160 aircraft in the Brazilian operation, at least 126 are stopped.

At least 13 aircraft operated by the airline in Brazil are blocked due to default. REUTERS/Ivan Alvarado ORG XMIT: PPPIA101 - REUTERS

According to people familiar with the case, the lessor who owns the equipment refused an initial proposal to renegotiate the operating contracts made by Latam Brasil. The company would have agreed to continue the negotiations, but the aircraft cannot be operated until there is a definitive agreement.

This Tuesday, the president of Latam Brasil, Jerome Cadier, said that the company's fleet should be reduced by up to 40% by the end of the year and that this Tuesday alone, the company should return 20 aircraft to leasing companies.

The group is experiencing financial difficulties due to the drop in demand caused by the new coronavirus pandemic. Latam's debts today, according to the request for judicial reorganization, are around US $ 18 billion. As of December 2019, the liability was $ 11 billion.

Translated by Kiratiana Freelon

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