Interjet has cash for one day of fuel, investors uncertain

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The second largest Mexican airline Interjet briefly resumed flights after two-day-long grounding. Its workers are protesting and investors say there are no funds.

On November 1, 2020, the airline cancelled all its flights until November 3, citing the lack of cash flow. Aeropuertos y Servicios Auxiliares (ASA), which provides ground services to Interjet, said that the company failed to pay for jet fuel. 

The airline had a debt of 1.2 billion pesos (over $55 million) for fuel alone following Q2 2020, and thus was unable to take credit. It had to pay for its fuel in advance but failed to do so following the weekend, grounding the last four operational planes.

However, payments have been made for November 3, and the company conducted scheduled flights between Mexico City (MEX) and six destinations within the country. 

On the same day, the company’s workers gathered to protest outside the airport over the lack of salary payments. They were met by investor Alejandro del Valle, who assured that the company had no money “even for fuel”, Aviación 21 reported. 

According to del Valle, the company was negotiating its tax debt with the Mexican government, which could pave way for future capital injection. 

Over 2,690 ticket purchases had to be rescheduled due to two-day-long grounding. A part of them may add to the collective lawsuit Interjet is facing over the airline’s many flight cancellations in recent months. 

Interjet has been called “effectively bankrupt” since 2019, although the company denied claims of actual bankruptcy. Most of its Airbus A320 fleet was repossessed by leasing companies due to lack of payment, forcing the company to fall back to its previously-grounded Sukhoi Superjet 100s. Of 22 SSJ-100s, only 4 were active in recent months, as the airline industry is gripped by the COVID-19 pandemic.

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