(Bloomberg) -- The chief executive officer of Latin America’s largest airline wants the carrier to take on a more socially conscious role after the Covid-19 pandemic forced it into bankruptcy and posed “existential questions” about its future.
Roberto Alvo, who was named CEO of Latam Airlines Group just as the global pandemic began to unfold in early 2020, said the company has to focus on customer service, the environment and equality after it emerged last week from a Chapter 11 process that stretched for nearly two and a half years.
“We were faced with an existential threat we didn’t know if we were going to survive,” Alvo said in an interview. “We have to think about what we need to do for the better of society.”
Alvo pointed to the Santiago, Chile-based carrier’s decision to fly millions of Covid-19 vaccines during the pandemic for free as an example of the role it can play. It has also announced programs to help offset carbon emissions and reduce waste in coming years.
Latam used the Chapter 11 process to slash $3.6 billion of debt. It has exited with $2.2 billion of liquidity at its disposal -- in the form of cash and credit lines -- as it eyes adding dozens of new routes as demand begins to rebound to levels seen before the pandemic. Alvo said Latam is well positioned to grow in the region after Covid-19 upended the travel sector, forcing several carriers to file for bankruptcy and leading to consolidation in the industry.
The company’s shares remain listed in Santiago and Alvo foresees it eventually returning to the New York Stock Exchange, from which it delisted during the process. Some of its largest creditors -- Sixth Street, Strategic Value Partners, and Sculptor Capital Management -- have become shareholders along with existing stake holders Delta Air Lines, Qatar Airways and the Cueto family.
“We did a good job of using the restructuring and crisis to make Latam stronger, much leaner, “ he said. “By mid-2023 we should be the same size we were pre-pandemic.”
Air travel in the region returned to pre-pandemic levels for the first time in September, according to the Latin America and Caribbean Air Transport Association, though international trips to several markets remained well below 2019 levels.
Airlines have focused largely on competing on price as demand has rebounded with low-cost carriers growing rapidly. Two of Latam’s biggest competitors, Colombia’s Avianca Group and Brazil’s Gol Linhas Aereas Inteligentes, joined forces under a common ownership structure after Avianca emerged from its own Chapter 11 restructuring.
Latam, which is the largest carrier in the region, plans to continue to offer a range of options to travelers, Alvo said. By 2029, the company will acquire 87 more fuel efficient A320neo aircraft from Airbus. It has implemented a joint venture Delta that Alvo said will give customers access to more destinations and cheaper fares.
“There is room for Latam to cater to a much broader spectrum of customers whether we provide a premium product for business travelers or lean tickets with very few perks,” he said. “We provide choice.”
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