Categories: Business

Aeromexico becomes latest LatAm airline to file for bankruptcy

MEXICO CITY (Reuters) – Mexican airline Aeromexico said on Tuesday it had begun restructuring under Chapter 11 proceedings, the latest Latin American airline to run into serious trouble as the coronavirus pandemic wreaks havoc on tourism and business travel.

FILE PHOTO: A plane of Mexican airline Aeromexico prepares to land at Benito Juarez international airport, as the coronavirus disease (COVID-19) outbreak continues, in Mexico City, Mexico June 26, 2020. REUTERS/Henry Romero

In a statement, Aeromexico categorized the Chapter 11 process as “voluntary” and said it was sticking to its goal of boosting operations in the coming weeks.

Aeromexico is the third airline to file for bankruptcy protection in Latin America, where carriers have been more affected by the crisis than anywhere else in the world.

The Mexican firm said it was maintaining its plan of quadrupling its international flights and doubling domestic flights next month as the coronavirus lockdown eases. Tickets, reservations, electronic vouchers and Premier Points remain valid, the airline said.

Aeromexico said it was in talks to obtain new, preferential financing as part of the Chapter 11 restructuring, known as debtor-in-possession financing.

Latin America’s two largest airlines, Chile’s LATAM Airlines Group (LTM.SN) and Colombia’s Avianca Holdings (AVT_p.CN), filed for Chapter 11 restructuring in May.

Unlike in the United States or Europe, Latin American governments have so far declined to bail out airlines, straining their finances.

Analysts predict many airlines in Latin America could disappear due to the effects of the pandemic, leading to weaker competition and higher ticket prices.

Investment holding company Aimia Inc (AIM.TO) threw Aeromexico a $50 million financial lifeline on Monday, after loaning it $50 million in May.

Delta Air Lines (DAL.N) holds a 49% stake in Aeromexico and a 20% stake in LATAM, and their bankruptcy processes put the U.S. carrier’s investment at risk of suffering a severe reduction in value or worse.

Reporting by Noe Torres in Mexico City; Additional reporting by Marcelo Rochabrun in Sao Paulo; Writing by Anthony Esposito; Editing by Shri Navaratnam

Read More : Source

Published by

Recent Posts

Trump blasts ‘left-wing cultural revolution’ at Mount Rushmore

US President Donald Trump railed on Friday against "angry mobs" that tried to tear down statues…

45 seconds ago

Iran declines to disclose cause of fire at Natanz nuclear site

Iranian investigators have determined the cause of a fire at the Natanz nuclear plant, a…

46 seconds ago

Trump denounces statue toppling during July Fourth celebration at Mount Rushmore

President Donald Trump on Friday celebrated Independence Day by defiantly holding a rally at Mount…

1 min ago

Trump accuses protesters who tear down statues of wanting to ‘wipe out our history’ in Fourth of July speech

CLOSE President Trump is getting a fresh push to don a face mask during the…

4 mins ago

Kimberly Guilfoyle, Donald Trump Jr.’s girlfriend and campaign official, tests positive for coronavirus

CLOSE President Trump's top health advisers attended a White House event with protective masks, though…

4 mins ago

The World Ends With You: The Animation Airs In 2021, Here’s Your First Look

Square Enix's hit game returns as an anime by Liam Doolan 3 hours ago© Square…

6 mins ago

This website uses cookies.