Aeromexico To Furlough 15% Of Its Workforce

Aeromexico is attempting to reduce its workforce by at least 15% by furloughing 2,596 workers in the last quarter of 2020. According to some motions presented to the United States Bankruptcy Court in New York, the airline is trying to “rationalize its workforce in the wake of the challenges facing a global airline in the midst of a pandemic.” Despite that, the Unions representing Aeromexico’s employees are not happy. Let’s investigate further.

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Aeromexico is trying to reduce its workforce by 15%. Photo: Getty Images.

Who’s getting axed?

Before the COVID-19 pandemic, Aeromexico had a workforce of 16,660 employees in several countries across the world. It had a fleet of over 125 aircraft and transported more than 20 million passengers per year.

But, the pandemic struck hard to the Mexican airline, which had to file for a Chapter 11 reorganization in the US. The New York Court recently approved the US$1 billion DIP Financing of Aeromexico, under one investor, Apollo Global Management. Aeromexico, to get that deeply needed money, has to launch several cost-saving initiatives, like layoffs.

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First of all, Aeromexico is planning on reducing its cabin crew staff by 766. Of these, 150 will be furloughed from the regional branch Aeromexico Connect while the rest will come from the main brand.

Also, Aeromexico will furlough 855 unionized employees that work on ground handling operations, sales, maintenance, and cargo operations. Additionally, the Mexican airline aims to fire 975 non-unionized employees from diverse areas like Financing, Marketing, Audit, Security, Human Resources, and more.

Finally, Aeromexico plans to reduce its pilot workforce but hasn’t announced so far how many pilots it will let go. The Pilot’s Union, or ASPA, has been mostly against the measures announced by Aeromexico.

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Aeromexico’s Unions, like the pilots, are not happy with the airline’s measures. Photo: Getty Images.

What are the Unions saying?

Several Unions back up Aeromexico’s employees. For instance, the pilots have ASPA; Aeromexico Connect’s cabin crews have STIA, Aeromexico’s cabin crew have ASSA, ground handling workers have Independencia. To a lesser extent, all these Unions have raised their voices against Aeromexico’s latest measures.

For example, STIA has said that, while it can’t stop the cabin crew layoffs, it will defend its members’ legal rights. Nevertheless, the pilots union, ASPA, has been the fiercest defendant of its members. In a statement to Simple Flying, ASPA said,

“The pilots received an unacceptable proposal (with changes) that look like those of an ultra-low-cost carrier. ASPA is working on a proposal that better suits the cost reductions needed by Apollo Global Management. But, to settle on this subject, first, we have to resolve, with Aeromexico, ten contractual breaches, including a wage increase of 3.78% that was inked in March. So far, the Union has agreed to have 266 pilots temporarily furloughed, plus a general salary reduction of 30%.” 

Moreover, ASPA has reached other pilots’ unions worldwide, via the International Federation of Air Line Pilots’ Associations, looking for international support against Aeromexico.

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Aeromexico recently launched a codeshare agreement with LATAM. Photo: Getty Images

What’s the latest with Aeromexico?

This week, Aeromexico announced a codeshare agreement with LATAM Brazil and LATAM Colombia. This massive announcement could be the first step to launching a larger codeshare with LATAM and maybe even with Air France-KLM.

Previous to that, Aeromexico reported a US$137 million loss during 2020’s third quarter. Finally, in October, the airline transported 870,000 passengers, an increase of 22.9% versus September 2020, although it is still 49% down as to October 2019. The domestic demand for Aeromexico is 27.5% down, while the international is 80.9% down. Meanwhile, the domestic capacity is 21.9% down, and the global is 68.4% down.

What do you think of Aeromexico’s cost-saving initiatives? Let us know in the comments.