Aeromexico declares bankruptcy
The Mexican flag carrier Aeromexico has filed for voluntary Chapter 11 protection in the United States on July 1, 2020. Despite the bankruptcy protection, the airline intends to continue operations.
The company stated that Aeromexico group and its certain affiliates filed Chapter 11 petitions in order to implement financial restructuring. Aeromexico, Aeromexico Connect and Aeromexico Cargo are all in the process, local media has reported.
The airline plans to continue operations throughout the bankruptcy process and claims the already sold tickets, reservations, vouchers, and points would not be affected, as outlined in the statement issued on July 1, 2020.
In fact, the Mexican flag carrier expects to double the number of its domestic flights and quadruple the number of international flights in July 2020 as compared to June 2020.
“We expect to utilize the Chapter 11 process to strengthen our financial position, obtain new financing and increase our liquidity, and create a sustainable platform to succeed in an uncertain global economy”, said Andres Conesa, Aeromexico CEO.
Alongside bankruptcy procedure, the company was also in talks to obtain new, preferential financing as part of the restructuring within the reorganization procedure known as “debtor-inpossession” or “DIP financing”, as outlined in the statement.
The day prior to the bankruptcy announcement, Aeromexico revealed receiving a second loan from investment holding company Aimia, which brought the total amount of loans to $100 million.
On June 19, Aeromexico said it was analyzing options to restructure both short and medium term financial commitments without affecting or disrupting operations. However, it denied planning bankruptcy at the time. “The Company hereby informs that it has not initiated, nor has it made the decision to initiate, a restructuring procedure under Chapter 11 of the United States Bankruptcy Code,” the statement read.
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