Aeromexico files for bankruptcy in US

Bloomberg

Grupo Aeromexico SAB, Mexico’s second-largest airline, filed for bankruptcy in the US, becoming the latest in a string of Latin American carriers to seek court protection after the Covid-19 pandemic caused a severe downturn in travel.
The carrier will “continue operating and use Chapter 11 as a way to strengthen its financial position and liquidity,” according to a statement to the Mexican stock exchange. Aeromexico said the goal will be “protecting and preserving its operations and assets and implementing the necessary operational adjustments to face Covid-19-related impact.”
Aeromexico saw the number of passengers it carried plummet more than 90% as governments grounded flights and travelers stayed home. The airline struck deals with labor groups and suppliers in May to cut costs by more than half to around $50 million a month, while offering its employees unpaid leave.
Latin American airlines, unlike their counterparts in the US and Europe, have received scant government support even as travel demand plunged and the coronavirus prompted countries to seal borders.
The region’s largest carrier, Latam Airlines SA, filed for Chapter 11 bankruptcy in May just weeks after Avianca Holdings SA, Colombia’s biggest airline.
Aeromexico operates routes in Mexico, and internationally to the US, Canada, Europe and Asia, among others. Delta Air Lines Inc is its biggest shareholder. The petition filed in federal bankruptcy court in Manhattan lists assets and liabilities of $1 billion to $10 billion and more than 100,000 creditors.
“The company has been evaluating the alternatives to improve its financial position after the impact of the crisis that affects all the airlines globally,” Aeromexico said in the petition.
The carrier’s available cash and the court’s approval to enter Chapter 11 will provide enough liquidity to comply with future obligations in an orderly manner, Aeromexico said. Tickets and existing reservations are still valid.