Aeromexico has formally completed its Chapter 11 bankruptcy filing in the United States. Last week, the United States Bankruptcy Court for the Southern District of New York issued a final decree, closing the Chapter 11 cases of the company and its subsidiaries.
Leaving behind the Chapter 11 process
Although Aeromexico had successfully emerged from the Chapter 11 process in March 2022, the case was still open. On 22nd December 2022, the court closed the case considering, among other things, that Aeromexico’s plan of reorganization “has been substantially consummated,” the airline announced in a statement. The plan went into effect on 17th March.
The Mexican carrier first filed for bankruptcy proceedings in June 2020. At that time, the Latin American airline industry was facing an unprecedented crisis due to the COVID-19 pandemic worldwide. Many governments in the region, including Mexico, chose not to financially support their local airlines, which forced several carriers into bankruptcy.
LATAM Airlines Group, Avianca, and Aeromexico filed for Chapter 11 procedures in the United States. Other airlines were not so lucky and ceased operations. Examples of now-defunct Latin American airlines are Interjet, TAME, and Itapemirim Transportes Aéreos.
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A look back at Aeromexico’s Chapter 11
Aeromexico spent 20 months under the Chapter 11 bankruptcy process, also known as a voluntary reorganization bankruptcy. During this time, the airline renegotiated with lessors, aircraft and engine manufacturers, employees, and creditors to reduce its debt to manageable levels.
At the end of the bankruptcy procedures, the airline obtained over $3.7 billion in unsecured loans, debtor-in-possession financing, and new capital contributions. The largest shareholders of the reorganized company include funds managed by Apollo Global Management, Delta Air Lines, and new Mexican investors. At the time, Andrés Conesa, CEO of the company, said,
“We look forward to starting a new chapter in our Company’s history, backed by a sound financial base, solid capital structure, and investors who have full confidence in our future. As we move forward, we will not only continue to streamline our company to become even more sustainable, resilient, and competitive, but we will also significantly expand our network and fleet.”
The Mexican carrier pledged to invest approximately $5 billion over the next five years in fleet and customer experience improvements. This investment would allow the airline to maintain its state-of-the-art service, it said.
How’s Aeromexico looking at the moment?
Between January and September 2022, Aeromexico recorded a net loss of almost $200 million. Nonetheless, the airline bounced back to profitability in 2022’s third quarter after seeing total revenues of about $1.07 billion.
In terms of its fleet, the airline closed the quarter with 141 aircraft, including 18 Boeing 787 Dreamliners (since then, the airline has received one additional widebody), one Boeing 737-700, 36 737-800s, 32 737 MAX 8s, 12 B737 MAX 9s, and 42 Embraer E190s.
As of November 2022, the airline carried 19.39 million passengers, according to data from the Mexican government. Compared to the same period in 2019, Aeromexico has had a 3.1% increase in the number of carried passengers.
Have you had the opportunity to fly with Aeromexico following its Chapter 11 procedure? How was it? Let us know in the comments below.
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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
