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LATAM Airlines Group, the region’s largest carrier, said on Wednesday that it had sought to extend until September the deadline to present its restructuring plan as part of the bankruptcy protection process initiated in 2020, Reuters reported. LATAM filed for bankruptcy protection in the U.S. in May of last year, hammered by the world travel crisis generated by the coronavirus pandemic. At the time, it was the world’s largest airline to take such action due to COVID-19. A judge had previously ordered the company deliver its restructuring plan by the end of June, and the company has said it hopes to wrap up the process in 2021. Latam also told Chilean securities regulators it has requested a second disbursement for $500 million under its DIP credit agreement. The airline said that the additional funds were necessary given “the extension of the health and mobility restrictions imposed by the authorities in the different countries in that the Company operates, as well as the analysis of the Company’s liquidity projection." The company also received a $1.15 billion debtor-in-possession loan in October last year. Earlier on Wednesday Latam said it expects to ramp up its June operations to 36% of their pre-coronavirus pandemic levels, bolstered by the quickening pace of vaccination in some countries in the region.

Latam Airlines Group SA Chief Executive Roberto Alvo, seeking to stave off an overture from rival Azul SA, said the bankrupt air carrier’s Brazilian operations aren’t for sale, Bloomberg News reported. Santiago-based Latam, which has now been in U.S. bankruptcy for more than a year, has its sights set on a strong chapter 11 exit — not a piecemeal sale of the business, Alvo said in an interview Wednesday. The carrier’s shares briefly slumped last week after it denied reports that Azul SA planned to buy Latam’s Brazilian subsidiary. While Alvo said he is “absolutely not” selling the Sao Paulo-based unit to the low cost competitor, Azul is now waiting to evaluate Latam’s bankruptcy exit plan and may propose the acquisition offer directly to Latam creditors. Azul has unsuccessfully floated to Latam executives the idea of carving out the domestic Brazil network, according to the person. Under the proposal, Latam, the largest airline in Latin America, would have been left to focus on business elsewhere in the region while maintaining links to the route network in Brazil.

Airbus SE laid out a long-term plan to return aircraft production to pre-pandemic levels, putting its suppliers and customers on notice that it is betting air travel, and jet demand, will bounce back quicker than others expect, the Wall Street Journal reported. Airbus said that it plans to lift production of its bestselling A320 narrow-body to 64 a month by the second quarter of 2023—topping its 2019 average monthly output of 60. It set out a longer-term ambition of reaching 70 a month at the beginning of 2024. That could rise to 75 in 2025, the company said. At the start of the crisis, Airbus cut rates across its programs by roughly 40% and reduced its A320 output to 40 a month. The new rate plan for the A320neo is “markedly higher” than previous expectations, according to Sandy Morris, an aerospace analyst at Jefferies in London. Jefferies had forecast an average production rate of around 52 a month in 2023 and 57 a month in 2024. Airbus shares were up almost 6% in midday European trading. Industry executives have repeatedly said that they expect travel demand to stay below pre-COVID levels for years. While Airbus has penciled in two full years before its factories are back where they were before the crisis, it is essentially telling its globe-spanning supply chain that the plane maker is sticking to what has been for months a more optimistic forecast for air travel recovery than many in the industry. Amid severe supply-chain constraints in many other industries—jolted as economies and demand snap back in many places—Airbus Chief Executive Guillaume Faury told his suppliers Thursday he expects them to make the investment now needed to deliver parts and services for a significantly ramped-up production schedule down the line.

The U.S. government is preparing to downgrade Mexico's aviation safety rating, a move that would bar Mexican carriers from adding new U.S. flights and limit airlines' ability to carry out marketing agreements, Reuters reported. The Federal Aviation Administration's (FAA) planned move is expected be announced in the coming days and follows a lengthy review of Mexico's aviation oversight by the agency. One airline industry source said the FAA's concerns did not involve flight safety issues but rather Mexico's oversight of air carriers. Downgrading Mexico from Category 1 to Category 2 would mean that current U.S. service by Mexican carriers would be unaffected, but they could not launch new flights and airline-to-airline marketing practices such as selling seats on each other's flights in code-share arrangements would be restricted. The action would mean that the FAA has determined that Mexico does not meet International Civil Aviation Organization (ICAO) safety standards as part of its safety assessment program. 

The bankrupt Air Force One supplier GDC Technics LLC has won court approval to borrow up to $800,000 in emergency financing and use cash pledged as collateral, despite objections by the company’s former partner Boeing Co., WSJ Pro Bankruptcy reported. Judge Craig A. Gargotta of the U.S. Bankruptcy Court in San Antonio said during a hearing on Friday that he would sign an order authorizing GDC to access up to an additional $300,000 in bankruptcy financing from MAZAV Management LLC, an indirect owner of GDC through GDC’s parent Oriole Aviation LLC. That is up from the initial $500,000 that GDC got approval to start using earlier this month. It is GDC’s “intent not to borrow any more money than absolutely needed,” the company’s bankruptcy lawyer Jason Rudd said during the hearing. Deborah Kovsky-Apap, a lawyer for the committee representing unsecured creditors, had objected during the hearing to the financing proposal because the lender’s junior liens on assets would be elevated to first priority, improving its position over the unsecured creditors. However, the judge overruled the objection. Judge Gargotta also allowed the Fort Worth, Texas-based aircraft modification and technology company to continue using cash collateral from senior lender GDC Investco LLC, one of four equity owners of GDC’s parent Oriole Aviation. GDC’s largest unsecured creditor, Boeing, had objected to the use of the cash collateral because the motion contained releases that would eliminate claims against corporate insiders before creditors could investigate potential claims. Boeing argued that it was inappropriate to grant broad releases to the equity owners and GDC’s directors and officers. Chicago-based Boeing has claims of about $6.7 million against GDC, including loans to the company, which worked on government executive fleets.

Philippine Airlines Inc. is in talks with plane lessors about reducing its fleet size and has told them it’s considering a chapter 11 filing in the U.S. to carry out a restructuring, Bloomberg News reported. The airline could return at least two Airbus SE A350s to lessors and four of the 10 Boeing Co. 777s in its fleet. Two A350s are in the process of being taken back by aircraft lessors and will be redeployed to other carriers. Prior to the negotiations, Philippine Airlines had six A350s. One lessor reached an agreement with the airline for it to keep a 777 and an A330. Philippine Airlines is working on documentation for a pre-packaged bankruptcy, with Seabury Capital advising on the restructuring. Founded in 1941, the airline said in a statement it is working with stakeholders “on a comprehensive restructuring plan” that will enable it to emerge from the global crisis financially stronger. Flights and operations won’t be affected in any restructuring, it said.

Boeing Co. accused the owners of bankrupt parts manufacturer Tect Aerospace Group Holdings Inc. of raiding the company’s assets and sought a stake in any legal claims against the corporate insiders allegedly responsible, WSJ Pro Bankruptcy reported. Boeing said that in return for providing roughly $60 million in bankruptcy financing, it deserves a stake in possible commercial tort claims against Tect’s directors and officers for potentially breaching their fiduciary duties to the company, which filed for chapter 11 protection last month. Tect appeared in bankruptcy court yesterday seeking final approval for its chapter 11 financing package. Boeing, a Tect customer, said that it is also the only lender to come to the company’s rescue and provide the financing needed to conduct asset sales. Judge Karen Owens of the U.S. Bankruptcy Court in Wilmington, Del., said that nearly all of the terms Boeing was requesting were reasonable and appropriate, including its request for an interest in potential claims against Tect insiders. The judge also ordered some tweaking to the financing package, saying that it would refinance more prebankruptcy debt held by Boeing than is customary. Wichita, Kan.-based Tect has reached a proposed deal to sell assets at its Everett, Wash., manufacturing plant for $31.1 million. The company also has facilities in Wellington and Park City, Kan.

A U.S. bankruptcy court will allow Grupo Aeromexico, which operates Mexico's largest airline, to increase the size of its fleet of planes, the company said on Friday, Reuters reported. Last week, Aeromexico agreed to purchase two dozen Boeing planes as part of a deal that should yield an estimated $2 billion in savings due to better conditions in some long-term maintenance for its existing fleet and leasing contracts. The first new planes will be incorporated into its fleet this year, including nine that should be in operation by this summer, while the rest are expected to arrive later in the year as well as in 2022, the airline has said. Aeromexico, which already has 107 planes, filed for chapter 11 protection in a U.S. court in June after the coronavirus pandemic slammed the global travel industry.

For most of last year, running an airline meant parking jets, laying off workers and haggling with governments for bailout funds in a desperate effort to stay out of bankruptcy as appetite for travel shriveled to nearly nothing. A new class of entrepreneurs believes the moment has arrived to do something that has proved difficult in the best of circumstances: start an airline, the Wall Street Journal reported. Upstart airlines are cropping up in North America, Europe, South America, Africa and Asia, as the pandemic continues to depress global travel. More than 90 new carriers, most with funding already secured, have plans in place to take off before the end of the year, according to Avolon Holdings Ltd., an aircraft leasing firm. Some of the upstarts are emerging from the ashes of airlines that failed during the pandemic. Others have been waiting for air travel to show signs of recovery so they can activate plans that were already in place. Most are hoping that they can seize the chance to pick up heavily discounted aircraft, snap up coveted space at once-congested airports and in some cases, hire laid-off pilots and flight attendants. In the U.S., two new airlines are looking to fly routes that larger carriers have ignored or left behind after years of consolidation. One of them, Avelo Airlines had its first scheduled flight Wednesday morning, from Hollywood Burbank Airport to Santa Rosa, in California’s Sonoma County. The airline, which has its corporate headquarters in Houston, is being started by Andrew Levy, the former CFO of United Airlines Holdings Inc., who began planning in 2018 to launch a low-cost carrier that would fly from less crowded secondary airports. Mr. Levy decided last November to go ahead with his plans.