The Chapter 11 Stopwatch

LATAM group filed chapter eleven bankruptcy today. That is to say, it gets some protection from its old failing business model assuring a newly reorganized business model during the COVID-19 crises stays viable. Chapter 7 US Bankruptcy is a forced sell-off protection of assets against overwhelming debt on the balance sheet, Chapter eleven is more directed towards an organizational reorganization of a company's operations by eliminating debt through sell-offs. Well, LATAM just proposed to the US Chapter 11 bankruptcy law today, as it attempts to protect it from failure as a company. Counting 19 leased aircraft would be returned immediately. Mostly the Airbus types for 15 and 4 Boeing 787 types going back to the lessor. The bleeding has just begun. Airbus and Boeing's product is being sent to the bench until COVID-19 is solved. A sell-off of owned airframes could follow pending economic realities.

Yahoo financial:

"However, the company, carrying a Zacks Rank #3 (Hold), felt the bankruptcy protection route would be the best option for a turnaround. Under Chapter 11 protection, the airline’s management team will remain intact. The provisions of bankruptcy protection will help in reducing disruptions to the carrier’s operations while protecting the interests of shareholders as its balance sheet is restructured to fit the present demand scenario.
 
LATAM Airlines, which competes with the likes of Copa Holdings CPA in the Latin American aviation space, secured funding from its shareholders, including two of its largest — the Cueto and Amaro families, and Qatar Airways — to provide up to $900 million in debtor-in-possession financing. Major U.S. carrier Delta Air Lines DAL also has a 20% stake in LATAM Airlines. Notably, LATAM Airlines has approximately $1.3 billion in cash on hand. Both Copa Holdings and Delta Air Lines carry a Zacks Rank #3.

LATAM Airlines, which reduced capacity by 95% in April and May due to the drop in demand, so far has not received government support. Presently, the carrier and its affiliates are in talks with the governments of Chile, Brazil, Colombia, and Peru for additional financial aid.
Apart from LATAM Airlines, Colombian airline Avianca Holdings AVH, carrying a Zacks Rank #2 (Buy), filed for bankruptcy protection earlier in the month due to demand slump and high debt burden. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of LATAM Airlines have plunged more than 68% since the beginning of February due to coronavirus-led travel demand woes. The industry has declined by 54.1% in the period.

It stands to reason both Airbus and Boeing are in the Laurel and Hardy days of transportation for a new and advanced 757 offering or A-321 parry. Airbus has nothing announced for its case but is working big on a new line-up soon as its custom, and Boeing will go big using its off-the-shelf technology it holds as a life vest during storms. Airbus is ready to send forward its C-series it had bought from Bombardier.

Commercial Aviation is in a "Sea Change" today and it will spool up with a convenient solution using fewer model types having more effectiveness through seats and efficiency. In other words, it will mitigate risks with sweet spot aircraft they were trending towards anyways with right sight efficiency and purpose. A prediction is single-aisle 757's, which will go 180 seats and a 4,000-mile range. and an A-321 doing the same as a new 757. A New 767 is in play using 787-300 standards competing with the A-330 NEO but just nipping at the A-330-NEO edges of range and seats. That would be 240 seats and 5,000 miles.
Gone would be the 737's 50-year-old concept.