"The U.S. Chapter 11 financial reorganization process provides a clear and guided opportunity to work with our creditors and other stakeholders to reduce our debt, address commercial challenges that we, like others in our industry, are facing as a group," the company said. "It is very different from the concept of bankruptcy in other countries and is not a liquidation proceeding."

LATAM's (LTM) CEO Roberto Alvo cited coronavirus-related travel restrictions as a main driver for the decision to file for bankruptcy.

"We are looking ahead to a post-Covid future and are focused on transforming our group to adapt to a new and evolving way of flying, with the health and safety of our passengers and employees being paramount," Alvo said in an infographic explaining the bankruptcy filing.

The voluntary reorganization will include LATAM's affiliates in Chile, Peru, Colombia, Ecuador and the United States.

This is the second major airlines in the region to file for bankruptcy in the month of May. Colombia-based Avianca filed for bankruptcy in the US Southern District of New York after facing coronavirus-related financial problems.