Interjet Cuts Flights, Salaries to Face COVID-19By Alicia Arizpe | Thu, 03/26/2020 - 12:01
The COVID-19 pandemic has been a blight for airlines due to the sharp decrease in flights and the strong travel restrictions placed by many governments. Mexican airlines have also been affected, as mentioned before, but the strain has put Interjet against the ropes as the airline battles against grounded aircraft and local debt.
The airline had been facing problems since late 2018, after its bet on Sukhoi airplanes fell through. Interjet had added these Russian airplanes to a previously Airbus-only fleet in order to capture an unattended market segment, but technical problems grounded several of these planes. By January 2020, the airline had announced that it would gradually phase out these planes and use Airbus aircraft exclusively. However, Interjet still has a debt with Sukhoi for several aircraft parts.
This is not the company’s only debt. The organization Mexicans Against Corruption and Impunity (MCCI) reported that Interjet owes Mexican authorities millions of dollars in rights of use of air space, taxes, jet fuel and customs. The airline, however, denied that there was any cause for concern and stated that it was closely working with the Mexican government to pay these debts.
It was under these circumstances that Interjet had to face the COVID-19 crisis. Travel restrictions and falling demand led the airline to cancel all its international flights starting on March 24 but the airline expected national flights to remain unchanged. To protect its workforce during this crisis, Interjet made an agreement with its union to cut down salaries by 50 percent. The airline also informed that it would cut unessential costs and negotiate deals with suppliers and lenders during this period.