Aeromexico files for bankruptcy in the United States, citing ‘unprecedented’ challenges

0

Mexico’s flagship airline announced on Tuesday that it has applied to begin its Chapter 11 restructuring, which will allow it to continue flying.

“Our industry is facing unprecedented challenges due to the significant decline in demand for air travel,” CEO Andrés Conesa said in a statement. “We are committed to taking the necessary steps to be able to operate effectively in this new landscape and be well prepared for a prosperous future when the Covid-19 pandemic is behind us.”

Like many airlines, Aeromexico has been forced to limit operations as demand for air travel has dried up. In recent months, the airline has grounded part of its fleet and announced in March that it start working “cargo flights only for the first time.”
The company is the latest Latin American carrier to file for Chapter 11 in the United States. In May, the Chilean LATAM and the Colombian Avianca (AVH) also started bankruptcy proceedingsciting the loss of business due to the pandemic.

Aeromexico intends to use the process “to strengthen our financial position, secure new financing and increase our liquidity,” Conesa said.

Day-to-day operations will continue as the company begins a financial overhaul. Passengers should still be able to travel using their existing tickets and employees will continue to be paid as usual, according to management.

The company also hints at a gradual recovery. As air travel begins to rebound in some countries, Aeromexico will “expand flight service” imminently, with plans to double its domestic flights and quadruple its international capacity in July from last month’s levels, a- he declared.

But the airline still faces a difficult road. The International Air Transport Authority estimated that it could take more than three years for international travel to return to pre-crisis levels.

The carrier must now “create a sustainable platform for success in an uncertain global economy,” Conesa added.

Share.

Comments are closed.