Category Archives: AeroMexico

AeroMéxico files its Plan of Reorganization

AeroMexico Boeing 737-8 MAX 8 XA-MAO (msn 43707) JFK (Jay Selman). Image: 404116.

Grupo Aeroméxico, S.A.B. de C.V. informs that on October 1, 2021, it filed, together with its subsidiaries that are debtors in the Company’s Chapter 11 voluntary financial restructuring process, the Joint Plan of Reorganization (the “Plan”), a disclosure statement related to the Plan (the “Disclosure Statement”) and a motion to approve solicitation procedures with respect to the Plan. The Company intends to file one or more supplements to the Plan on the schedule set forth in the Plan or as otherwise ordered by the Court. A hearing to approve the Disclosure Statement is expected to be held on or about October 21, 2021. Upon entry of an order approving the Disclosure Statement, the Company intends to begin the process to solicit votes on the Plan.

The filing of the Plan is a key milestone on the Company’s path to emergence from its Chapter 11 process, and the Company looks forward to continue to engage with its stakeholders to finalize the Plan on a consensual basis.

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.

Top Copyright Photo: AeroMexico Boeing 737-8 MAX 8 XA-MAO (msn 43707) JFK (Jay Selman). Image: 404116.

AeroMexico aircraft slide show:

Aeromexico obtains court approval extending the exclusive period to file a plan

Grupo Aeroméxico, S.A.B. de C.V. informs that the United States Bankruptcy Court for the Southern District of New York, presiding over Aeromexico’s Chapter 11 voluntary financial restructuring process, has approved a 75 calendar day extension of the Company’s exclusive period to propose a plan of reorganization.  The Court approved the extension because, among other reasons, of the good progress the Company has made with its restructuring.

Aeromexico 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.

AeroMexico receives court approval for its new Boeing order

AeroMexico Boeing 787-9 Dreamliner XA-ADG (msn 44426) PAE (Nick Dean). Image: 940207.

Grupo Aeroméxico, S.A.B. de C.V. has announced that following the information disclosed on April 23, 2021, regarding (i) Aeromexico’s agreement to increase its fleet with twenty-four (24) new Boeing 737 MAX aircraft, including Boeing 737-8 and Boeing 737-9 MAX and four (4) 787-9 Dreamliner aircraft as part of its restructured agreements with the manufacturer and certain lessors and (ii) Aeromexico’s related agreements with other suppliers and financial entities ((i) and (ii) collectively, the Company informs that the United States Bankruptcy Court for the Southern District of New York, presiding over Aeromexico’s Chapter 11 voluntary financial restructuring process, has approved Aeromexico’s entry into the Transactions.

Aeromexico 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 the necessary adjustments to face the impact from COVID-19.

Top Copyright Photo: AeroMexico Boeing 787-9 Dreamliner XA-ADG (msn 44426) PAE (Nick Dean). Image: 940207.

AeroMexico aircraft slide show:

AeroMexico to add 24 new Boeing 737 MAX aircraft and four 787-9 Dreamliners

AeroMexico Boeing 787-9 Dreamliner XA-ADG (msn 44426) PAE (Nick Dean). Image: 940208.

AeroMexico has made this announcement:

Aeromexico has reached agreement to increase its fleet with twenty-four (24) new Boeing 737 aircraft, including B737-8 and B737-9 MAX, and four (4) 787-9 Dreamliner aircraft as part of the airline’s restructured agreements with the manufacturer and certain lessors to incorporate new aircraft. Other suppliers and financial entities also participated in these transactions, resulting in a comprehensive deal that offers multiple benefits to the carrier.

Note: AeroMexico resumed 737 MAX operations on November 18, 2020.

Image: Boeing.

Image AeroMexico.

The addition of the first aircraft is scheduled for this year, with nine (9) offering service beginning this summer season, and the rest arriving in the second half of 2021 and during 2022. These transactions represent a milestone in Aeromexico’s transformation for the upcoming years, and their economic terms are highly competitive compared to current market levels.

These transactions make it possible for Aeromexico to modify long-term maintenance contracts and reduce leasing costs of eighteen (18) other aircraft that are part of the current fleet. Aeromexico estimates that reaching this comprehensive agreement will lead to total savings of approximately 2 billion dollars.

The comprehensive agreements are subject to the approval of the United States Court for the Southern District of New York, in charge of Aeromexico’s Chapter 11 voluntary financial restructuring process.

Aeromexico’s current fleet is comprised of 107 aircraft: 47 Embraer 190s, 42 Boeing 737s, and 18 Boeing 787 Dreamliners.

Image: AeroMexico.

Aeromexico 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 the necessary adjustments to face the impact from COVID-19.

Top Copyright Photo: AeroMexico Boeing 787-9 Dreamliner XA-ADG (msn 44426) PAE (Nick Dean). Image: 940208.

AeroMexico aircraft slide show:

Grupo Aeromexico’s capacity increased 7.3% in the first quarter of 2021 while it reorganizes

AeroMexico Boeing 737-8 MAX 8 XA-MAQ (msn 43710) LAX (Michael B. Ing). Image: 953030.

AeroMexico issued this report for the first quarter 2021:

Grupo Aeromexico S.A.B. de C.V., reported its unaudited consolidated results for the first quarter 2021.

KEY FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER 2021

  • On June 30, 2020, Aeromexico announced that it and certain of its affiliates had filed voluntary Chapter 11 petitions in the United States (“Chapter 11”) to implement a financial restructuring, while continuing to serve customers. The Company intends to use the Chapter 11 process to strengthen its financial position and liquidity, protect and preserve its operations and assets and implement necessary operational changes to address the impact of the ongoing COVID-19 pandemic.
  • Grupo Aeromexico’s first quarter 2021 capacity, measured in available seat kilometers (ASKs), increased by 7.3% compared to fourth quarter 2020, primarily driven by a sequential recovery in the international market. Total ASKs for the first quarter decreased by 37.5% year-on-year due to the impact of the COVID-19 pandemic.
  • Grupo Aeromexico’s first quarter 2021 revenue reached $6.9 billion pesos, a 51.3% year-on-year decrease. During the quarter, revenue per ASK (RASK) in pesos decreased by 22.2% year-on-year.
  • EBITDAR for the period amounted to negative $398 million pesos, an improvement of $1.5 billion pesos versus fourth quarter of 2020 and a year-on-year decrease of $1.9 billion pesos. First quarter 2021 operating loss amounted to $3.4 billion pesos, an improvement of $2.9 billion pesos compared to fourth quarter 2020 and a year-on-year decrease of $1.7 billion pesos.
  • Cost per ASK (CASK) in pesos was $1.458 pesos, a 29.1% decrease compared to fourth quarter 2020 and a 4.6% year-on-year increase. CASK in dollars reached $0.072 dollars, a 27.8% decrease compared to fourth quarter 2020 and a 3.0% year-on-year increase. These results reflect efficiencies achieved after the successful implementation of initiatives aimed to reduce structural cost despite a 37.5% reduction in capacity (measured in ASKs).
  • Aeromexico’s cash position as of March 31st, 2021, amounted to $18.0 billion pesos, equivalent to approximately $881 million dollars.
  • As of March 31st, 2021, Grupo Aeromexico’s operating fleet comprised 106 aircraft.

Grupo Aeroméxico confirms that its voluntary process of financial restructuring under Chapter 11 of the legislation of the United States of America, will be carried out in an orderly manner while it continues operating and offering services to its customers with the same quality that characterizes it, contracting from its suppliers the goods and services required for its operation.

Top Copyright Photo: AeroMexico Boeing 737-8 MAX 8 XA-MAQ (msn 43710) LAX (Michael B. Ing). Image: 953030.

AeroMexico aircraft slide show:

AeroMexico loses $487 million in the fourth quarter

Grupo Aeromexico S.A.B. de C.V. reported its unaudited consolidated results for the fourth quarter 2020.

KEY FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER 2020

  • On June 30, 2020 Aeromexico announced that it and certain of its affiliates had filed voluntary Chapter 11 petitions in the United States (“Chapter 11”) to implement a financial restructuring, while continuing to serve customers. The Company intends to use the Chapter 11 process to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement necessary operational changes to address the impact of the ongoing COVID-19 pandemic.
  • Grupo Aeromexico’s fourth quarter capacity, measured in available seat kilometers (ASKs), increased by 39.6% compared to third quarter 2020, primarily driven by a sequential recovery in domestic market recovery. Total ASKs for the fourth quarter decreased by 47.6% year-on-year due to the impact of the COVID-19 pandemic.
  • Grupo Aeromexico’s fourth quarter 2020 revenue reached $7.2 billion pesos, a 53.5% increase compared to the third quarter of 2020 and a 58.4% year-on-year decrease. During the quarter, revenue per ASK (RASK) in pesos increased by 10.0% compared to third quarter 2020 and decreased by 20.6% year-on-year.
  • During the quarter, Aeromexico recognized restructuring costs and total one-off adjustments of $4.9 billion pesos (most of them non-cash adjustments) from which $2.4 billion pesos impacted operating profit, mainly associated with restructuring costs, impairment and accelerated depreciation and amortization of property and equipment, among others.
  • EBITDAR for the period amounted to negative $1.9 billion pesos. Excluding restructuring costs and one-off items EBITDAR was positive $83 million pesos, an improvement of $2.0 billion pesos versus third quarter of 2020 and a year-on-year decrease of $4.6 billion pesos. Fourth quarter 2020 operating loss amounted to $6.4 billion pesos. Operating loss excluding restructuring costs and special items reached $3.9 billion pesos, an improvement of $669 million pesos compared to third quarter 2020 and a year-on-year decrease of $5.7 billion pesos.
  • Cost per ASK (CASK) in pesos, excluding restructuring costs and one-off items, was $1.709 pesos, a 3.8% decrease compared to third quarter 2020 and a year-on-year increase of $0.459 pesos, equivalent to 36.7%, mainly due to the reduced operations derived from the impact of the COVID 19 pandemic. CASK in dollars, excluding restructuring costs and one-off items, reached $0.083 dollars, a 2.9% increase compared to third quarter 2020 and a year-on-year increase of $0.018 dollars, equivalent to 27.6%
  • Aeromexico’s cash position as of December 31st, 2020, amounted to $8.2 billion pesos, equivalent to approximately $399 million dollars.
  • As December 31, 2020, Grupo Aeromexico’s operating fleet comprised 106 aircraft including five Boeing 737 MAX that resumed operations during December.

 

Grupo Aeroméxico confirms that its voluntary process of financial restructuring under Chapter 11 of the legislation of the United States of America, will be carried out in an orderly manner while it continues operating and offering services to its customers with the same quality that characterizes it, and will continue contracting from its suppliers the goods and services required for its operation. The Company will use the advantages of Chapter 11 to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement the necessary adjustments to face the impact of COVID-19.

AeroMexico aircraft photo gallery:

AeroMexico aircraft slide show:

AeroMexico requests termination of ASPA and ASSA collective bargaining agreements to labor authorities

Grupo Aeroméxico, S.A.B. de C.V. has announced that, as a follow up to its previous relevant events dated December 29 and 31, 2020 and January 8, 2021, it has not yet been possible to satisfactorily conclude the negotiations of the Collective Bargaining Agreements (“CBAs”) with the Asociación Sindical de Pilotos Aviadores de México (“ASPA”) and the Asociación Sindical de Sobrecargos de Aviación de México (“ASSA”).

The acceptance, by said unions, of the adjustments presented by the Company to the CBA is essential to: (i) face the adverse financial, operational and structural effects caused globally to the airline industry by the COVID-19 pandemic, (ii) comply with the commitments and objectives required by the DIP lenders under the Senior Debtor in Possession Credit Facility (“DIP Financing”), obtained within the Company’s voluntary financial restructuring process, under Chapter 11 of the Bankruptcy Code of the United States of America, and (iii) comply with the necessary conditions to have access to the next disbursement under Tranche 2 of the DIP Financing, resources that are essential not only to preserve the ordinary course of business but to avoid generalized defaults on Aeromexico’s obligations with financial creditors under the DIP Financing.

Aeromexico was able to obtain an extension to the term provided in the corresponding Credit Agreement, in order to comply with the DIP Financing conditions and obligations. The new term expires on January 27, 2021. However, the serious situation of the pandemic and the consequent continuation of the restrictions derived from the declaration of force majeure issued by government authorities, in Mexico and abroad, continue to reduce the demand for flights and undermine the Company’s finances.

Aeromexico requires ongoing access in a fast and timely manner to the DIP Financing funds to meet its payments and commitments in the ordinary course of business with key suppliers, authorities, and contributors. Consequently, the Company has decided to request termination, due to the fact of force majeure that undoubtedly affects the Company, the current CBA with the ASPA and ASSA unions, which has been duly submitted, on this date, to the competent labor authorities in full compliance with the applicable provisions of the Federal Labor Law (Ley Federal de Trabajo).

Based on the force majeure situation in which Aeromexico is, it has requested termination of the collective bargaining relationship, as well as the individual agreements with a certain number of pilots and flight attendants in order to reflect the new operating reality of the Company. This situation of force majeure has forced Aeromexico to carry out a workforce reduction as a consequence of the decrease in its ordinary activities.

This decision seeks to guarantee the continuity of our operations to continue offering the best possible service to customers, without affecting their rights.

Aeromexico reiterates that it is in the best position to continue conversations with both ASPA and ASSA, within the period indicated above, looking to find schemes that comply with the necessary conditions to continue accessing the available resources. We appreciate all the support received by our contributors and regulatory authorities during our restructuring process.

Aeromexico will continue pursuing, in an orderly manner, the voluntary process of its financial restructuring under the Chapter 11 process, while continuing to operate and offer services to its customers and contracting from its suppliers the goods and services required for operations. Likewise, it will continue using all the available instruments at its disposal to avoid going from the current financial restructuring situation to a liquidation situation, with the consequent loss of the source of employment affecting thousands of direct and indirect jobs.

AeroMexico reports third quarter results

Grupo Aeromexico S.A.B. de C.V. has reported its unaudited consolidated results for the third quarter 2020.

KEY FINANCIAL HIGHLIGHTS FOR THE THIRD QUARTER 2020

  • On June 30th Aeromexico announced that it and certain of its affiliates had filed voluntary Chapter 11 petitions in the United States to implement a financial restructuring, while continuing to serve customers. The Company intends to use the Chapter 11 process to strengthen its financial position and liquidity, protect and preserve its operations and assets and implement necessary operational changes to address the impact of the ongoing COVID-19 pandemic.
  • Grupo Aeromexico’s third quarter capacity, measured in available seat kilometers (ASKs), increased by 67.6% compared to second quarter 2020, primarily driven by a sequential recovery in domestic market recovery. Total ASKs for the third quarter decreased by 64.1% year-on-year due to the impact of the COVID-19 pandemic.
  • Grupo Aeromexico’s third quarter 2020 revenue reached $4.7 billion pesos, a 79.1% increase compared to the second quarter of 2020 and a 74.5% year-on-year decrease. During the quarter, revenue per ASK (RASK) in pesos increased by 6.9% compared to second quarter 2020 due to market demand improvements and decreased by 29.0% year-on-year.
  • EBITDAR for the period amounted to negative $381 million pesos, an improvement of $4.6 billion pesos versus second quarter 2020. Third quarter 2020 operating loss amounted to $3.6 billion pesos an improvement of $19.8 billion pesos compared to second quarter 2020.
  • During the quarter, the Company started to recognize aircraft ownership costs in accordance with the temporary Payment by the Hour agreements (PBH) reached with operating lessors.
  • Cost per ASK (CASK) in pesos reached $2.091 pesos, a 77.2% decrease compared to second quarter 2020 and a year-on-year increase of $0.792 pesos. CASK in dollars reached $0.095, a 75.9% decrease compared to second quarter 2020 and increased year-on-year by $0.028 dollars.
  • Aeromexico generated $108 million pesos positive cash flow from operating activities. Aeromexico´s cash position as of September 30th, 2020, including restricted cash, amounted to $7.8 billion pesos equivalent to approximately $352 million dollars. Aeromexico´s cash including restricted cash to last-twelve-month revenue ratio was 20.2%.
  • As of September 30, 2020, Grupo Aeromexico’s operating fleet comprised 101 aircraft excluding the six Boeing 737 MAX aircraft temporarily grounded.

Grupo Aeroméxico confirms that its voluntary process of financial restructuring under Chapter 11 of the legislation of the United States of America, will be carried out in an orderly manner while it continues operating and offering services to its customers with the same quality that characterizes it, contracting from its suppliers the goods and services required for its operation. The Company will use the advantages of Chapter 11 to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement the necessary adjustments to face the impact of COVID-19.

AeroMexico reaches agreement with lessors

Grupo Aeroméxico, S.A.B. de C.V. has announced that the Company received approval by the United States Bankruptcy Court for the Southern District of New York to modify the majority of its existing aircraft equipment leases into power by the hour agreements (“PBH Agreements”) that will substantially reduce Aeromexico’s monthly aircraft and engine costs for the duration of the PBH period. PBH Agreements allow for Aeromexico to reset monthly lease costs based on utilization of the equipment at today’s market rates, with significant monthly savings, when compared to Aeromexico’s original contracted rates.  Such PBH Agreements were entered into between Aeromexico and 27 different leasing companies covering 82 aircraft and 14 spare engines.

Andrés Conesa, Aeromexico´s CEO said: “This is a significant milestone in Aeromexico’s restructuring process, which paves the way to negotiate long-term agreements with our leasing company  and financing partners on the aircraft equipment that makes sense to retain in our strategic fleet”.

Aeromexico will continue pursuing, in an orderly manner, the voluntary process of financial restructuring under the Chapter 11 process, 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 use the advantages of the Chapter 11 proceeding to strengthen its financial position and liquidity, protect and preserve operations and assets, and implement the necessary adjustments to manage the impact of COVID-19.

AeroMexico aircraft photo gallery: