Interjet is in big debt. The airline owes more than 150 million USD in taxes, fuel, and other items, according to MCCI (a Mexican organization battling corruption). It also pointed out that the owners of the airline are close with the Mexican president, Andrés Manuel López Obrador. Will the Mexican Government save Interjet?
Who does Interjet owe money to?
Firstly, Interjet owes 51 million USD in fuel to Mexican provider Aeropuertos y Servicios Auxiliares. Recently the Mexican government confirmed that it had reached a settlement with the airline about this debt in particular.
The airline also owes approximately 98 million USD in different taxes to the Government, and five million USD in another tax, known as TUA, collected by airlines for every passenger that arrives on Mexican soil.
Finally, the airline also owes nine million USD for the use of Mexican airspace and another, undisclosed amount to Sukhoi, banks, export credit agencies and suppliers.
Is the patient already dead?
Last year, William Shaw, Interjet’s CEO, got caught on camera saying that the airline was beyond help. “When Interjet got to the hospital, the patient was already dead,” he said in a video that went viral.
Por si fuera poco se filtró un video en el que supuestamente William Shaw, Director General le dice a unos empleados "sin costo-beneficio, se va a acabar esta compañía" y "el paciente (Interjet), ya estaba muerto cuando llegó al hospital, yo me voy…" https://t.co/04PMJd5gve
— noodle (@figugu) April 1, 2019
Nevertheless, the airline has managed to grow in the number of passengers transported. In 2019, it received 15 million passengers, a growth of 10.3% in comparison with the previous year.
The Mexican carrier also opened a bunch of new routes and beat Aeromexico in Ecuador. Interjet consolidated as the main low-cost airline in Mexico for international travel. It has also recently signed agreements with airlines such as JetBlue, Emirates, and others.
But, as we know, it is not enough to sell a bunch of tickets and have double-digit growth in passenger numbers to be profitable.
In 2017, Interjet had a net loss of approximately 13 million USD (253 million pesos). The year after, the loss was bigger: 173 million USD (more than three billion pesos). Then, during the first quarter of 2019, the airline lost 26 million USD.
After that, the airline changed its CEO and welcomed Shaw. Interjet also decided not to post its financial results, as the law doesn’t oblige it to do so. This means we don’t know for certain what kind of numbers it had for the rest of 2019. But we think they are not good.
What will happen with Interjet?
This is the million-dollar question. People have been saying that Interjet could go under at any moment. Interjet had denied these claims. It argues that it is a victim of a slew of fake news created by its competition (specifically, Aeromexico).
Among all the noise, one thing is for sure: the owners of the airline are close to the Mexican president. Miguel Alemán Magnani, the owner, is a member of the businessmen board that works closely with López Obrador.
The president himself has said previously that the Government has an obligation to support Mexican companies, as reported by Forbes.
Alemán Magnani, along with other businessmen, a few weeks ago attended a dinner with López Obrador. In that meeting, the President asked them to buy tickets for the raffle of the luxurious 787 private jet.
Some people have concluded, with all this information, that the Mexican government will not allow Interjet to go bankrupt. If it indeed disappears, it would be a great hit to Mexican connectivity.
What do you think? Let us know in the comments.