Image credits: Artur Tumasjan on Unsplash
/
News Article

Businesses Owe Money to Mexico City’s International Airport

By Cas Biekmann | Wed, 12/23/2020 - 17:41

Airlines, restaurants, shops and other businesses that operate in Mexico City´s International Airport (AICM) have increased their debt as a result of an economic depression brought on by the COVID-19 pandemic, Forbes Mexico reported.  As of October 31, these businesses owed over MX$8 billion (US$397.4 million) for their rentals and airport services.

In 2019, these same companies owed MX$5.57 billion (US$277.2 million) to the AICM, nevertheless, were able to reduce this debt significantly in early 2020. Despite this reduction debt rose quickly in April 2020, the first month when Mexico’s Ministry of Health initiated a lockdown to stop the spread of the pandemic.

Many companies have not paid rental spaces, electricity and water bills, luggage inspection, parking spaces, landings, overnight stays, among others. Further debt includes Airport User Fee (TUA), a tax charged to domestic or foreign flight users for the use of facilities. The TUA is adjusted to the dollar exchange rate monthly, but charged in pesos.

The news only adds to the other problems airlines and other companies face in the sector due to COVID-19.  The International Air Transport Association (IATA) said 2020 will close with negative operating income numbers. A main reason is the sharp decline in passenger traffic, which has dropped between 61.47 and 92.8 percent between April and September. In Mexico City’s airport, travelers decreased from 37.3 million passengers from January to September 2019 to around 15.7 million in the same time period in 2020.

Companies such as Grupo Aeroméxico reported they are negotiating a  late payment totaling MX$1.3 billion pesos (US$64 million), while filing for bankruptcy in July in the US.   The airline is currently restructuring its finances to pay the TUA next year.

2020 comes as a shock to the industry: only one year ago, results were solid. 2019 saw a 4.2 percent growth in passenger traffic. While it was a small decrease when compared to 2018 figures, companies appreciated the steady growth after 2008’s economic recession and expected to continue on this positive trend - this all changed in early 2020. IATA estimated the sector would experience a US$510 billion cut in revenue in general. Airlines would see losses of US$118.5 billion over 2020.  “The history books will record 2020 as the industry’s worst financial year, bar none,” said Alexandre de Juniac, Director General and CEO of IATA.

The data used in this article was sourced from:  
Forbes, MBN
Cas Biekmann Cas Biekmann Journalist and Industry Analyst