Latam Airlines Group SA has filed for Chapter 11 bankruptcy according to Bloomberg. Latam will continue to operate on a reduced schedule and has commitments for a bankruptcy loan for up to $900 million and approximately $1.3 billion cash on hand. Colombia’s Avianca filed for Chapter 11 bankruptcy earlier this month and Hertz filed a few days ago.
These Chapter 11 filings are an infrequent by common occurrence when it comes to airlines. We looked at what happens to frequent flyer miles in the event of a bankruptcy in this post here.
If you’ve been with LATAM for several years, going back to LAN, you may not know that they changed their expiration policy in the last year or so, with no notification to members. It used to be that if you took a paid LAN flight, ALL of your kms expiration was reset for 3 years. When they moved to Multiplus, they changed the kms to points, but then SILENTLY changed the expiration policy so that taking a LATAM flight no longer renews your LATAM points if you’re based in the USA (or Europe), even though it renews your LATAM miles (for those countries where LATAM uses miles), and LATAM points expire in 24 months even though LATAM miles expire in 36 months.
So I just found out (by logging into my account and checking the expiration page for the next 12 months) that almost all my points are set to expire by the end of this year. I found this out just before LATAM shut down for Covid-19 reasons. I started a new complaint on their website today, and I suggest that if you are a USA-based LATAM member you log in now and check when your points expire, and if like me you thought it’d be 3 years but now you see that it’s 2 years, or if like me you thought that a recent LATAM flight should have reset it but now you see it didn’t reset it, you too may want to file a complaint.
This especially makes the LATAM Visa (issued by US Bank) totally useless, if there is indeed no way any more to extend LATAM points expiration. Some of my points earned from the LATAM Visa are going to expire first, NEXT MONTH (June), thought it’s a small number of points expiring at first (but almost all of my points expiring at the end of the year).
Like Avianca, there is a chrome extension to use Latam points on Amazon. I just can’t get it to work. It always says, “Be back soon!” when I want to use it.
Why are these South American Airlines filing for Chapter 11 in the US? AirBerlin never tried that route.
I don’t know, but my guess is the majority of South American airlines’ bondholders are in the US while AirBerlin’s bondholders were in Germany or elsewhere in Europe.
Unfortunately nowadays filing bankruptcy is becoming the easy cowards way out…
What would you recommend for a business with debt that lost 90% of its revenue due to government mandate? Please do tell oh brave one.
Pulling themselves by the bootstraps.
Trump pulled himself up from his bootstraps.. he started from nothing and turned into a trillionaire.. that is why he is bigger than Jesus
Bin laden killed a couple thousand. Trump killed 100,000. He is indeed gifted.
YES, he did. And Obama never could do that!
This is a Chapter 11 reorganization. The debt is still due.
Not necessarily. It might get conveted to equity.
Sure, if the bondholders agree to a swap.