Aeromexico files for US failure, citing "unprecedented" challenges

Aeromexico files for US failure, citing “unprecedented” challenges

The Mexican airline announced Tuesday that it had asked to begin restructuring under Chapter 11, which will allow it to continue flying.

“Our industry is facing unprecedented challenges due to a significant decrease in the demand for air transportation,” CEO Andrés Conesa said in a statement. “We are committed to taking the necessary measures so that I can operate effectively in this new landscape and be well prepared for future success when the Covid-19 pandemic is behind us.”

Like many airlines, Aeromexico has been forced to limit its operations as demand for air travel has dried up. Over the last few months, the airline has taken over a portion of its fleet, and announced in March that it would begin to operate “wants to charge only for the first time”.
The company is the last Latin American carrier to present for Chapter 11 in the United States. In May, the LATAM of Chile and that of Colombia Airlines (AVH) he also initiated bankruptcy proceedings, citing the loss of business due to the pandemic.

Aeromexico intends to use the process “to strengthen our financial position, obtain new financing and increase our liquidity,” Conesa said.

Day-to-day operations will continue as the company begins a financial review. Passengers will still be able to fly with their existing tickets, and employees will continue to be paid as usual, according to management.

The company is also experiencing a phase of gradual recovery. As air travel begins to rebound in some countries, Aeromexico will “expand flight service” imminently, with plans to double domestic flights and quadruple international capacity in July compared to levels from last month, he said.

But the airline is also making a hard road ahead. The International Air Transport Authority has estimated that it could take more than three years for international travel to return to pre-crisis levels.

The carrier now needs to “create a sustainable platform to succeed in an uncertain global economy,” Conesa added.

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