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News Article

Aeroméxico Set for Financial Restructuring Process

By Emilio Aristegui | Mon, 10/04/2021 - 17:00

Aeromexico recently obtained approval for its  for Joint Plan of Rreorganization as the airline informed via a press release on September 22, from a US court, which was the latest step in its financial restructuration under Chapter 11 Bankruptcy Protection, reported the airline in a press release.

The airline had submitted the restructuration plan on September 21, which granted an extension period for further amendments. Grupo Aeroméxico, S.A.B. de C.V. informs that the United States US Bankruptcy Court for the Southern District of New York, presiding over Aeroméxico's Chapter 11 voluntary financial restructuring process, granted the Company's request for extensions of the plan exclusivity periods. The exclusive period for filing a chapter 11 plan now expires on October 8, 2021, subject to further extension as ordered by the Court.” 

As reported by MB, there are concerns on how this reorganization will look like, “Mexican Pilots Union (ASPA) urged Grupo Aeroméxico to respect the law as it undergoes the financial reorganization it started after filing for Chapter 11 bankruptcy protection. The law requires that Mexican investors keep the majority of voting shares of the airline.” ASPA also has concerns for this new reorganization regarding the airline’s competitiveness and they have tried to persuade Aeromexico to leave the Chapter 11 stage in order to, “flourish as the most important airline in Mexico in an increasingly competitive Latin American market.”

However, Aeromexico does not seem to step back as the airline also declared that, “Aeroméxico will continue pursuing, in an orderly manner, its voluntary financial restructuring through Chapter 11, while continuing to operate and offer services to its customers and contracting from its suppliers the goods and services required for operations. The Company will continue to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement necessary adjustments to mitigate the effects of COVID-19.”

The company looks set on its plan and it remains to be seen whether or not they will continue to finally develop a is undergoing a financial new reorganization process that will salvage them from the to overcome the 2020 economic crisis. The airline continues to work under American regulations in search of better financial results so far, “The Company maintains its position that Final Valuation Materials have been delivered as required under the DIP Credit Agreement. That position is supported by the Unsecured Creditors Committee, organized groups of Aeroméxico's creditors and other DIP lenders.”, but it had previously run into trouble with its unions as it strove to access a US$1 billion loan,

Aeromexico also declared that they were looking to file a Plan of Reorganization consistent with the delivered Final Valuation Materials around September 30, 2021. However, the airline has a due date until October 8, 2021, as previously reported by MBN. Its Mexican Pilots Union (ASPA) had urged Grupo Aeroméxico to follow local law, which required that Mexican investors kept the majority of voting shares.” ASPA also has concerns for this new reorganization regarding the airline’s competitiveness and they have tried to persuade Aeromexico to leave the Chapter 11 stage in order to, “flourish as the most important airline in Mexico in an increasingly competitive Latin American market.”

However, Aeroméxico claims that it will continue pursuing the Chapter 11 financial restructuring, which it claims allows it to continue to operate and offer services to its customers and contracting from its suppliers the goods and services required for operations. The Company will continue to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement necessary adjustments to mitigate the effects of COVID-19.”

The data used in this article was sourced from:  
MB, Aeromexico
Emilio Aristegui Emilio Aristegui Junior Journalist and Industry Analyst