The Mexican carrier Interjet won’t fly again in 2020. Today, sources at the airline confirmed that Interjet canceled its remaining flights between December 18 and 31 due to a lack of cash to pay for fuel. Now the question remains: will Interjet be able to fly again?
What do we know?
After months of battling financial struggles, Interjet grounded all its flights on December 11. It was the third time in less than two months that it took that measure. Previously, it said that a lack of cash, maintenance issues, and the COVID-19 crisis were the culprits of the halt to operations.
Still, the expectation was that Interjet would resume flights on December 18. Unfortunately for the airline, the more than 5,000 employees, and thousands of stranded passengers, that won’t be the case.
Early morning, several sources in the company stated that the flights wouldn’t resume as promised. The airline hasn’t published an official statement yet and has been quiet on social media for the last two days.
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Debt after debt has drowned the Mexican carrier
Interjet was launched in 2006. For years it seemed like a top player in the Mexican aviation industry, flying more than 80 routes in ten countries across America.
But, under that aura of success, Interjet’s debts grew. According to the Mexican tax authority, the airline has owed taxes since 2013. Moreover, there’s the possibility that Mexican authorities could prosecute the company and top executives in 2021 for fraud charges, as reported by Bloomberg.
According to the newspaper, Interjet owes approximately US$310 million in unpaid taxes to the Mexican Government. Additionally, it owes US378 million to other creditors, including the State’s fuel provider in Mexico.
The airline also hasn’t paid wages for the last three months, which has led to an exodus of workers. In the midst of this crisis, Interjet’s workers Union even asked the Mexican Government to seize the company. More than 5,000 workers could be unemployed in the next few weeks, in a scenario that reminds everyone of the bankruptcy of Mexicana de Aviacion ten years ago.
How did we come to this?
The question will remain for the next few years: what went wrong at Interjet?
Many will point out that the former management of the company made a terrible mistake in 2013. It signed an order for 30 Sukhoi Superjet 100.
Interjet became the only operator of the Russian narrowbody in the Americas, having as many as 22 units. The airline bought them at a discount price that seemed a bargain at the time. But they came at a much tougher price no one could have foreseen.
The Russian manufacturer couldn’t provide a steady flow of spare. This led to Interjet cannibalizing its fleet to repair the airplanes that were flying.
Additionally to the Sukhoi order, Interjet signed with Airbus for 40 new A320, although that order eventually increased. So, instead of growing under a one model fleet, or even one OEM fleet, Interjet decided to try out two different aircraft types. This led to increasingly higher costs as, for example, it needed pilots certified to operate the Sukhoi and pilots certified to fly the Airbus.
At the same time, Interjet flew away from its low-cost origins. Trying to compete internationally with Aeromexico, Interjet started offering a legacy service while keeping a fare war with Mexican low-costs Viva Aerobus and Volaris.
Interjet paid the toll for its mistakes. Entering 2020, the airline had three years in a row with net losses. Then COVID-19 came and, apparently, put the final nail in the coffin. We’ll see.
What do you think of Interjet’s latest developments? Let us know in the comments.