Mexican carrier Aeromexico, one of Latin America’s largest airlines, announced Tuesday it was filing for Chapter 11 bankruptcy in the United States, citing the “unprecedented impact” of the coronavirus pandemic.
“We have initiated a voluntary procedure to implement financial restructuring under the Chapter 11 process in the United States of America. The legal process will not disrupt the airline’s operations,” the company said in a statement.
The Mexican carrier is the latest Latin American airline to seek Chapter 11 relief after the region’s two largest, Chilean-Brazilian LATAM and Colombia’s Avianca, filed for bankruptcy in the United States in May.
“We are committed to taking the necessary steps to secure our future by voluntarily entering the Chapter 11 process to become stronger and more resilient,” Aeromexico CEO Andres Conesa said.
Chapter 11 is a legal process that allows companies to restructure financially and operationally under the supervision of a US court, while protecting them from the risk of creditor claims and enabling them to continue to operate.
With countries across the region in lockdown over the coronavirus, flight activity by the end of May had plummeted 93 percent from around 200,000 a day, with losses in revenue estimated at $18 billion, according to International Air Transport Association IATA.
Aeromexico resumed some of its domestic and international routes in early June.
IATA estimates it will take Latin American airlines up to three years to bring flights and passengers back to pre-pandemic levels.