LATAM Airlines will fire “at least” 2,700 workers in Brazil, including pilots, its Brazilian arm said on Saturday, as the bankrupt carrier struggles to cut costs and cope with an industry collapse due to the COVID-19 pandemic, Reuters reported. In a statement, LATAM Brasil said it opened a voluntary redundancy process on Friday which will run through Aug. 4, after which a further minimum 2,700 jobs will be cut. The announcement followed the breakdown in talks with the SNA union over workers’ pay, the statement said. O Globo and O Estado de S.

Latin America is at the centre of the coronavirus pandemic, suffering some of the worst infection rates and highest death tolls in the world, the Financial Times reported. Now economists warn that the region faces more bad news: its sickly economies risk falling into a new debt crisis even worse than the last big bust of the 1980s. The continent was struggling with multiple “pre-existing conditions” before the virus took hold: anaemic growth, weak health systems, low tax revenues, high levels of borrowing and an over-reliance on commodity exports.

LATAM Airlines, the largest airline group in Latin America, said today that it had secured an additional $1.3 billion for its financing proposal before a New York bankruptcy court, while adding its unit in Brazil to the debt restructuring process, Reuters reported. LATAM filed for U.S. bankruptcy protection in May, aiming to reorder $18 billion in debt. It was the world’s largest airline to date to seek an emergency reorganization due to the coronavirus pandemic. Today it said it had secured an additional $1.3 billion in funding from Oaktree Capital Management L.P.

Bankrupt LATAM Airlines and Avianca Holdings are dramatically retrenching their once grand ambitions amid the COVID-19 pandemic, reducing competition in Latin America as they mull once-unthinkable cooperation with rivals, Reuters reported. Since May, LATAM has exited Argentina, partnered with rival Azul SA in Brazil and cut back domestic operations in Chile, while Avianca has departed Peru. LATAM is now open to a deeper alliance with Azul, even as the two airlines usually control a combined 60% of Brazil’s domestic market.

Antonio Barbosa had hoped to find new employment when the bakery he worked at in São Paulo fell victim to Brazil’s prolonged economic slump, the Financial Times reported. Then the coronavirus pandemic struck, all but killing off the 41-year-old’s hopes of finding work and leaving him sleeping on the streets. “I fear things will not get better in this country, so I will never have a job again,” he said. His plight reflects the enormous challenges confronting Latin America’s largest economy.

Brazilian telecoms firm Oi SA announced late on Monday a proposed plan that, if approved by creditors, would allow the company to exit a long bankruptcy restructuring process that began in 2016, Reuters reported. Under the plan, Oi hopes to sell its mobile unit for at least 15 billion reais to refocus the company on its fiber network. Brazil’s largest fixed-line carrier had approximately 65 billion reais ($12.65 billion) of debt when it filed for bankruptcy protection.

A second wave of Covid-19 would deepen this year’s recession in Latin America’s three largest economies by more than 1 percentage point, according to the Organisation for Economic Co-operation and Development, Bloomberg News reported. Argentina and Brazil would suffer the biggest hits, shrinking by 10% and 9.1%, respectively, while Mexico would contract by 8.6%, Paris-based OECD said in a report published on Wednesday. A possible second wave of the virus could come between October and November following the easing of containment measures currently in place, the organization said.

Simultaneously grappling with surging deaths from Covid-19, recession and a weak currency, Brazil at least won’t have problem finding dollars to pay for imports and service its foreign debt in the aftermath of the pandemic, Bloomberg News reported. As Brazilians stop traveling and spending money abroad, the country’s long-running current account deficit is narrowing fast and could even become a surplus this year. In April alone, it was a positive $3.8 billion, the highest ever according to data compiled by Bloomberg.

LATAM Airlines, the largest Latin American air transport group, had losses of $2.12 billion in the first quarter after an accounting adjustment of its assets amid the coronavirus pandemic, the company said in a statement late on Friday, Reuters reported. LATAM said its operational quarterly result was 17% higher year-on-year despite the fact that in March it reduced its offer of flights due to the first effects of the health crisis.

LATAM Airlines Group’s U.S. bankruptcy filing this week will delay its potential bailout in Brazil to at least July and also push back aid to its rivals at least through the end of June, two sources said on Thursday, Reuters reported. The delays will add further strain to Brazil’s airlines, which were already in weak shape before the pandemic. Rivals Azul SA and Gol Linhas Aereas Inteligentes SA are also negotiating bailouts. “The bailout will happen; what could happen is that it may be staggered due to LATAM’s situation,” said one source.