Summary

• Aeromexico, one of the oldest active airlines in Latin America, experienced bankruptcy and disappeared in 1988.
• Corruption and mismanagement, including payment of wages to non-employees, contributed to the downfall of the original airline.
• Aeromexico has tough competition from LCCs in the domestic market but remains the primary airline for international operations in Mexico.

Back in 1988, there was a time when Aeromexico ceased to exist. From April 15th to October 1st of that year, the airline went bankrupt, stopped flying, and disappeared altogether. Then, it was reborn. Well, not exactly. Let's investigate further.

How was Aeromexico born?

Aeromexico's history began in September 1934. Its original name was Aeronaves de Mexico, and it would keep it until the seventies. While it wasn't one of the first airlines to appear in Latin America, currently, it can be considered one of the oldest still active, behind avianca, LATAM, Aeropostal Alas, and Cubana de Aviación. Aeromexico's official name was Aeronaves de México.

Read more: The evolution of Aeromexico's fleetAlong with its historic rival, Mexicana de Aviación, the two were the leading airlines in the country. Both airlines grew exponentially, scheduling flights to the US and Europe. At the same time, both captured the essence of luxury that we now remember in the air industry during the last century. But under the surface, Aeromexico was in deep trouble. In 1959, the Mexican Government acquired, by decree, all the shares of Aeromexico.

Over the next two decades, the airline soared in the skies until a crisis hit the nation in 1982. That year, the Mexican peso devalued an unprecedented 470%. During the next six years, the peso fell even more. In a nutshell, a dollar in 1982 cost 46 pesos; in 1988, it was valued at 2,298 pesos. This was one of two nails in the coffin for the first Aeromexico.

Corruption played a major part in the tragedy

Francisco McGregor, a former pilot of Aeromexico in the eighties, recently wrote in a piece for A21,

"It wasn't a secret that the airline paid wages to people who weren't in the company, from politicians to artists."

The former Captain of Aeromexico added that, by the eighties, the airline was among the least punctual in the world. It lacked operative efficiency and had a lousy administration led by the Mexican Government. Aeromexico paid one of the highest rental fees in the industry at the time. It even lent some of its planes to make presidential trips, which also hit the airline's schedules, said McGregor.

But the final blow for the airline didn't come from here. It came from the ground employees. Their union started a strike in 1988, and the government seized the moment, declaring the airline bankrupt.

How did it fly again?

On September 7th, 1988, a new Aeromexico was born. But this time, it wasn't Aeronaves de Mexico as it was before. It changed its name to Aerovías de México. So, in essence, it was a new airline. It adopted the brand, logo, and livery of the old Aeromexico, though. Kind of what may happen with the new Mexicana de Aviación. As a recap, Mexicana de Aviación, the original one, went bankrupt in 2010. The government is now launching a new Mexicana de Aviación (2.0, if you like) with the old brand and name, but under the army's administration. It is set to begin flying shortly, despite overall confusion as to what its purpose actually is.

The relaunch of Aeromexico was made possible due to an alliance between the Government, which had recently allowed the former airline to collapse, and the pilots union in Mexico. The new airline started operations on October 1st, 1988. It had a fleet of 25 airplanes and a workforce of 3,500 employees.

The priorities at that moment were the consolidation of the business model, improvement in punctuality, reliability, luggage management, and onboard service. In 1995, Aeromexico bought Mexicana de Aviación, and both airlines almost disappeared again a few years later after a new economic crisis hit the country in the nineties.

Eventually, the Government purchased both carriers. Finally, in 2007, a group of private investors bought Aeromexico. Since then, not much has changed in this regard. Aeromexico remains the most important airline in the country for international operations. Nevertheless, it has taken a step back in the domestic market, unable to face the growth of the low-cost model in Volaris and Viva Aerobus. During the COVID-19 pandemic, Aeromexico successfully underwent a Chapter 11 bankruptcy process in the United States.

As of November 2023, Aeromexico has a fleet of 153 aircraft. It operates 133 narrowbodies (from Embraer E1s to Boeing 737 MAX 9s), and 20 widebodies (Boeing 787 Dreamliners -8 and 9s). The firm carried 18.2 million passengers in the first three quarters of 2023, according to data from the Mexican government.

What do you think of Aeromexico's history? Let us know in the comments.

Source: A21

• 

  Aeromexico

  IATA/ICAO Code:

  AM/AMX

  Airline Type:

  Full Service Carrier

  Hub(s):

  Mexico City International Airport

  Year Founded:

  1934

  Alliance:

  SkyTeam

  Airline Group:

  Grupo Aeromexico

  CEO:

  Andrés Conesa Labastida

  Country:

  Mexico

  Region:

  North America

  Loyalty Program:

  Aeromexico Rewards