The Mexican airline Interjet may have looked at a first attempt to obtain protection from creditors through a Mexican bankruptcy proceeding, equivalent to Chapter 11 in the US. Interjet claims this information is false and that it is not looking for any help nor protection from the Mexican justice system. Let’s investigate further.
Bureaucracy prevented Interjet from filing the procedure
Debtwire published yesterday that Interjet failed “in a first attempt to obtain protection from creditors through a Concurso, or bankruptcy proceeding.”
The carrier failed to do it due to the bureaucracy in Mexico. Currently, due to the coronavirus pandemic, the legal system in Mexico is working at a slower pace. For this reason, the judges in the country are not receiving any new legal filings. They are only working with proceedings that were already underway before the pandemic.
According to Debtwire sources, the judge was arbitrary in its decision of not accepting the paperwork. It added that Interjet might file for a bankruptcy proceeding later this week.
If Interjet actually goes with the proceeding, it would become the second airline in Latin America to do something of the sort in 2020. On Sunday, Avianca filed for a Chapter 11 bankruptcy in the US.
Interjet denies the news
Over the last few months, Interjet has appeared over and over in the news. More often than not, the news coming out of the airline has not been good. We’ve reported previously that Interjet has lost up to 58 Airbus aircraft from its fleet, repossessed by leasing companies. This has led Interjet to revive some of its already parked Sukhoi Superjet fleet. The airline is operating three (out of 22) Russian-made planes.
Additionally, the International Air Transport Association (IATA) Clearing House suspended Interjet with immediate effect due to a lack of payment. Finally, some reports state that Interjet is in debt with the Mexican Government, and this led to the withdrawal, by the authorities, of four Sukhoi airplanes.
Interjet is having none of it. On Sunday, the airline issued a statement saying that there is a defamation campaign against Interjet. It added,
“It is despicable that in this crisis [… some are] willing to pay for a dirty campaign against our company and board with the publication of messages and commentaries that do not picture the current state of our organization.”
The airline added that all “truthful” information about the company should come from Interjet.
So, what has Interjet said? First, that it is renegotiating the terms with the leasing companies and that some airplanes lease prices are over the current market conditions. Second, that Interjet decided to leave IATA’s Clearing House, not the other way around. Third, it says that it is paying its taxes in Mexico.
How’s Interjet doing right now?
In March, Interjet had a 34% decrease in the number of passengers, in comparison with 2019. Still, the most significant fallout in its numbers may have happened in April, when the airline stopped flying with its Airbus fleet.
We currently don’t have the data from Interjet’s April, as the airline is not making it available. Other airlines such as Aeromexico and Volaris saw a decrease of up to 90%. Currently, Interjet reduced its number of routes from 44 international and 42 domestic to just six local routes. And, of these six domestic routes, only the Mexico City-Cancun operates daily.
Additionally, as we’ve said, Interjet only operates three Sukhoi aircraft at the moment. Some sources have said that the plan is to come back with a fleet of, at most, 35 airplanes. How will this fleet be composed? That’s currently a mystery.
What should Interjet do to keep afloat during the crisis? Let us know in the comments.