LATAM becomes biggest airline victim of crisis

South America's largest carrier filed for U.S. bankruptcy protection on Tuesday (May 26).

The move by LATAM Airlines comes just weeks after Colombia's Avianca went bust.

But while Avianca had undergone management turmoil and losses,

Chile's LATAM had posted profits for the last four years of more than $700 million.

LATAM CEO Roberto Alvo tried to reassure stockholders.

"I want to be clear. Chapter 11 is not about liquidation, bankruptcy or insolvency. On the contrary, it is an opportunity to reorganize debt and consequently to preserve the LATAM Group, as well as the workers and collaborators, as much as possible. If we have chosen to take this decision, it is because we are committed to continue flying."

Latin American governments have been reluctant to bail out their airlines - a sharp contrast to the help provided by European and U.S. authorities to their carriers.

Chile's Economy Minister Lucas Palacios said on Tuesday he would not rule out a bailout, but also didn't propose one.

In the lead-up to the bankruptcy filing, LATAM laid off 1,800 employees.

The carrier said it raised up to $900 million from major shareholders to support operations through its bankruptcy reorganization.

LATAM also said it has $1.3 billion in cash on hand.