The Mexican carrier Aeromexico is finishing 2021 with a number of passengers close to the pre-pandemic traffic levels. Despite the ongoing Chapter 11 bankruptcy process, Aeromexico is flying strong due to an incredible bounce back from the Mexican airline industry. What can we expect from Mexico’s oldest operator next year? Let’s find out.

Chapter 11 exit

If everything goes according to plan, Aeromexico should exit Chapter 11 in the first months of 2022. Judge Chapman approved Aeromexico’s exit financing motion and has set a schedule for plan confirmation. Aeromexico is set to have the plan confirmation hearing between January 18 and 21.

Nonetheless, the airline is facing a few setbacks. Some creditors are not happy with the current Plan and exit financing.

Earlier this week, the Official Committee of Unsecured Creditors strongly urged all creditors to reject Aeromexico’s plan.

While the Committee fully supports the pursuit of an exit financing transaction and reorganization plan, it believes there has been a damaging influence of insiders throughout Aeromexico’s exit financing process. Therefore, the Committee believes the Plan is not in the best interest of Aeromexico’s unsecured creditors.

The Committee, Invictus Global Management, and the Ad Hoc Group of OpCo Creditors believe certain insiders (like Delta Air Lines) are benefiting while leaving other creditors and Aeromexico itself not in the best position. They are objecting to the airline’s plan.

Therefore, we don’t anticipate the smoothest of rides for Aeromexico in the next two weeks. Nonetheless, the airline should exit Chapter 11 in 2022.

Back to pre-pandemic traffic levels

Mexico has had the best traffic recovery worldwide in 2021. According to data provided by the Mexican government, the airline industry recovered 95% of its pre-pandemic traffic levels by November. That’s right, 95% overall, both domestic and international! In December, it could have easily gotten back to 100% or even a little further. We will have to wait for a little to check out December stats.

While Volaris and Viva Aerobus are already well over their pre-pandemic traffic levels, Aeromexico has been slower to recover. Nonetheless, it has.

Domestically, Aeromexico closed in November by carrying 1.4% more passengers than 2019. Internationally, it has only recovered 79% of its traffic (it is still a remarkable recovery, though).

In 2022, Aeromexico should go back to passenger growth in both segments. Moreover, the airline expects to be profitable again next year. Whether that goal is achieved or not depends on several factors.

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A new aircraft order?

Before the COVID-19 pandemic, Aeromexico was looking at options to renew its Embraer E1 fleet. Reportedly, the airline was at a crossroads between the E2 and the Airbus A220 models.

If Aeromexico exits Chapter 11 in 2022, the airline could resume those plans. The E1 fleet is aging, and new generation aircraft should lower costs for Aeromexico. In Brazil, Azul expects to have a 100% next-gen fleet by 2026 by replacing the E1 with E2s and have incredible savings. Aeromexico could do something similar.

Nonetheless, we will not hear a word regarding a new aircraft order while Aeromexico is in Chapter 11.

Do you expect Aeromexico to come out stronger from its Chapter 11 process? Do you believe the airline could announce an order for new aircraft in 2022? Let us know in the comments below.