SAS, Latam, Other Foreign Carriers Find Restructuring Haven in US

Struggling foreign airlines that serve US cities have increasingly fled to American bankruptcy courts, finding friendly Chapter 11 features for reconfiguring crippling debt loads and burdensome aircraft deals.

Distressed multinational corporations have often favored Chapter 11’s predictability and the international breadth of a US federal court order. But facing pandemic-related financial difficulties, foreign airlines in particular are spurning their home country’s insolvency courts and using links to US property—however attenuated—to establish jurisdiction and initiate restructuring.

Over the last two years, major air carriers based in Latin America, Europe and Asia, including SAS AB, Avianca SA and Latam Airlines Group SA, ...