LATAM scraps plan to acquire Boeing B737s after talks end with bankrupt Gol

By Dietrich Knauth

NEW YORK (Reuters) - LATAM Airlines said on Wednesday that it was no longer seeking to acquire Boeing B737 planes either from bankrupt Brazilian carrier Gol or other sources, opting to look for alternative narrowbody aircraft after talks failed.

The two airlines clashed shortly after Gol filed for bankruptcy protection in the U.S. in January, with Gol accusing LATAM of trying to poach its planes and pilots. LATAM then offered to acquire any B737s that Gol no longer wished to operate after its bankruptcy restructuring.

Gol is trying to renegotiate terms on 90 aircraft leases by the end of May, and LATAM did not say how many planes it hoped to acquire during Gol's bankruptcy.

LATAM blamed Gol's "lack of meaningful engagement" for the deal's failure, in a letter filed on Wednesday in Gol's bankruptcy case.

Gol declined to comment on LATAM's letter.

LATAM said that the "scarcity of available B737 aircraft, as well as the debtors' refusal to cooperate" had forced LATAM to pursue alternative narrowbody aircraft to bolster its fleet and meet rising consumer demand.

"LATAM has been unable over the last several months - despite its extensive efforts - to obtain B737 aircraft from other sources unrelated to the debtors," LATAM's attorneys wrote. "Accordingly, LATAM is unlikely to continue pursuing any transactions involving the B737."

Airlines have needed to adjust their business plans as safety concerns have forced Boeing to slow production of its best-selling 737 Max.

The U.S. Federal Aviation Administration (FAA) stopped Boeing from expanding its 737 MAX production after a mid-flight cabin blowout on an Alaska Airlines flight. The FAA gave Boeing 90 days to address systemic quality-control issues revealed by the incident, and Boeing is about halfway through that period.

(Reporting by Dietrich Knauth; Editing by Sonali Paul)