Aeromexico files on bankruptcy in the US, citing "unprecedented" challenges

Aeromexico files on bankruptcy in the US, citing “unprecedented” challenges

Mexico’s top airline said on Tuesday it had applied for restructuring under Chapter 11, which would allow it to continue flights.

“Our industry is facing unprecedented challenges due to the significant reduction in demand for air transport,” said CEO AndrĂ©s Conesa in a statement. “We are committed to taking the necessary measures to be able to operate effectively in this new landscape and to be well prepared for a successful future when the Covid-19 pandemic is behind us.”

Like many airlines, Aeromexico has been forced to reduce its operations as demand for air travel has declined. In recent months, the airline has landed part of its fleet and announced in March that it will do so. startup “Flights only for cargo for the first time.”
The company is the last Latin American carrier to submit Chapter 11 to the United States. In May, Chile’s LATAM and Colombia Avianca (AVH) He also went bankrupt, citing a loss of business from the pandemic.

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

Daily activities will continue as the company begins an economic review. Passengers should be able to fly using their existing tickets and employees will continue to be paid as usual, according to the address.

The company is also hinting at a gradual recovery. As air travel begins to recover in some countries, Aeromexico will “expand its flight service” immediately, with plans to double domestic flights and quadruple international capacity in July compared to last month, he said.

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

The airline must now “create a viable platform to succeed in an uncertain global economy,” Conesa added.

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