Aeromexico’s situation worsening amid bankruptcy and layoffs
Aeromexico’s Q2 2020 financial results report net loss of $1.3 billion (MXN27 billion) and 84.5% decrease of revenue as over a tenth of the company's workforce got fired, indicating deepening problems for the largest Mexican airline.
The company declared Chapter 11 bankruptcy in June 2020 yet continued its operations and even intended to expand its domestic flights, a plan hardly compatible with the county's rising amount of COVID-19 infections and over 22% depreciation of Mexican peso relative to the US dollar.
Passenger demand dropped by 89.9% and passenger capacity was reduced by 77.9% on a year-to-year basis, scrambling the company's plans that still had a note of optimism in them by the end of Q1 2020. A lot has changed since then.
In a desperate attempt to reduce expenses, 1,963 of the firm's 14,697 workers were laid off during the second quarter. Furthermore, salaries and related expenses were reduced by 63% in comparison with Q2 2019 (Q2 2020 saw salary-related expenses increase by 2%).
Aeromexico is partly owned by Delta, adding to the expenses of the worst-hit US airline.
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