LATAM Airlines Group LTM said Wednesday it is closing its Argentina subsidiary for an indefinite period because of difficult economic conditions, but that international flights and cargo operations in the country will continue as normal with other carriers in the group.
The largest airline in Latin America, based in Santiago, Chile, filed for court-supervised bankruptcy protection in the U.S. last month, but its Argentina subsidiary was not included in the process and is the only subsidiary to close.
LATAM said the decision to shutter the Argentine airline was made because the COVID-19 pandemic has wiped out most of its business and it was unable to reduce its cash drain, an apparent reference to the Argentine government's strict travel ban, which forbids non-nationals from entering the country.
Whether the company will eventually try to restart is an open question.
The shutdown only affects domestic routes in Argentina. LATAM Cargo will continue operating between four cities in Argentina and the U.S., Brazil, Chile and Peru using its freighter fleet, repurposed passenger planes for cargo and the lower hold of passenger aircraft operated by other airlines in the group.
LATAM Airlines Argentina was a conveyor for moving imports and exports between international gateways and local markets.
Airlines worldwide are struggling to cope with the economic fallout from the coronavirus, but governments in South and Central America have not provided much financial support
Colombian flag-carrier Avianca also filed for Chapter 11 bankruptcy last month in an effort to restructure.
In related news, LATAM Cargo said it has extended its PHARMA product to more of its network to provide customers alternatives as demand grows to move pharmaceutical products from Europe to Latin America.
During the past three months, the company has added transit stations in Miami; Santiago, Chile; Buenos Aires, Argentina; and a second entry point in Sao Paulo, Brazil that offer routes to Puerto Rico, New Zealand, Ecuador and Paraguay.
PHARMA offers specialized transportation for temperature-sensitive medicines and biologics, including temperature-controlled aircraft and warehouse, thermal blankets to minimize temperature fluctuation, and segregation from general cargo at origin and destination. LATAM offers both active temperature monitoring and adjustments, or passive temperature controls.
Photo: Flickr/Christian Juker Photography
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.