Case
Case - Latam Airlines and COVID-19: Seeking Bankruptcy Protection in the United States (Grade 8,5)
- Course
- Institution
Case Study 3: Seeking Bankruptcy Protection in the United States
[Show more]
Seller
Follow
ha223zc
Reviews received
Content preview
Case Study 3: Latam Airways 1Task 5.3: Case - Latam Airlines and COVID-19:
Seeking Bankruptcy Protection in the United States
Maastricht University
School of Business and Economics
, Case Study 3: Latam Airlines 2
Table of Content
1. Introduction ................................................................................................................................2
2. Chapter 11 vs Chapter 7 .............................................................................................................2
3. Why filing bankruptcy in the US? What about Chilean capital markets? ..................................4
4. Vulnerabilities of Latam in comparison to the industry .............................................................6
5. The long-term viability of Latam Airlines .................................................................................8
6. Is Latam’s DIP a good investment choice? ...............................................................................10
7. Chilean government public aids to Latam ...................................................................................12
8. Final Assessment/Conclusion ..................................................................................................15
9. Bibliography.............................................................................................................................15
10. Declaration of originality .....................................................................................................16
1. Introduction
Latam Airlines Group, with an enterprise value of $10 billion in 2019, was among the world's largest
airlines. It is known for its diverse international ownership structure and unique business strategy that
combines cargo and passenger travel. The company had bet on the growth potential of the aviation
industry in Latin America. However, the unforeseen shock of the Covid-19 pandemic had a catastrophic
impact on the aviation sector. Financially, 2020 was recorded as the worst year in aviation history. The
Pandemic led to a collapse in revenue streams due to lockdowns and grounded flights, exposing
weaknesses in Latam's financial structure. Latam had entered the Pandemic with a high level of leverage
compared to its peer companies, making it unable to meet its debt obligations to creditors. This report
aims to provide a comprehensive analysis and recommendations for Latam Airlines Group to navigate
the challenges posed by the COVID-19 pandemic and emerge as a resilient and sustainable player in
the aviation industry.
2. Chapter 11 vs Chapter 7
When COVID-19 hit the world, Latam Airways had already increased its leverage ratio and got caught
in an unfortunate, vulnerable state that forced the company to file for Bankruptcy. However, Bankruptcy
can consist of two very different processes: liquidating the company's assets or reorganizing the
2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ha223zc. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.89. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75323 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now