Aeromar Describes Financial Challenges that Led to its Downfall
After announcing the termination of all air operations, Aeromar described how the situation unfolded, arguing that its financial and operational decisions and efforts were insufficient to ensure continuity.
Mexican regional airline Aeromar, which officially stopped operations on Feb. 15 after almost four decades of flying, outlined in a press release the actions it took to ensure continuity and keep afloat. The airline attributed its inability to continue operating to complications in the aeronautical sector and to the arrival of the COVID-19 pandemic.
The airline explained that it sought to continue flying but was not capable of solving its financial challenges, explained the airline via a press release. Aeromar argued that since it began operations 35 years ago, its top priorities have been to take care of its clients’ needs and make sound financial decisions to keep the company operational. Aeromar explained that all of its financial and operational decisions sought to, “privilege, at all times, the operational safety of the airline, the employment of our collaborators, and the air connection with various capitals of some states of the country such as Tepic, Colima and Ciudad Victoria,” reads the press release.
During the past 20 years, other airlines have also become insolvent. Of these, Mexicana de Aviación stands out, as it was one of Mexico’s largest commercial airlines and stopped operations in 2010.
For years, Aeromar had implemented several austerity measures, pausing the payment of dividends and other benefits to shareholders for the past 20 years. Aeromar says that its aim was to wait for the right economic and financial conditions to restore the company. In May 2019, Aeromar obtained a US$35 million investment after an intense search for capital, which ended up falling short of the company’s operational needs.
Four years ago, the Service Tax Administration (SAT) assigned an auditor to Aeromar to ensure the airline paid its tax debts. Under their supervision, the airline paid up to MX$130 million (US$7 million) to regularize the company’s debt and financial situation, argues Aeromar.
Aeromar’s press release indicating the finalization of air operations appears on its website, which no longer allows flight purchases. Aeromar’s fleet includes 10 aircraft of the ATR 42 and ATR 72 600 series, the newest models of the Franco-Italian manufacturer ATR, with an average age of four years.
Aeromar announced the termination of all its air operations in Mexico, the US and Cuba, on Feb. 15, 2023. The airline attributed the decision to struggles to pay its debt and workforce, following a “series of financial problems,” as reported by MBN.