Grupo Aeromexico, S.A.B. de C.V. (BMV “AEROMEX”) said July 23, 2020 that as part of the rights afforded within its voluntary financial restructuring process under Chapter 11 of the United States Bankruptcy, the Company on July 3 requested Court authorization to reject certain lease agreements for 19 aircraft to their respective lessors in an orderly manner.
These aircraft are not part of the Company’s strategic fleet requirements under current market conditions. The aircraft involved are: 5 Boeing 737-800s, 5 Boeing 737-700s and 9 Embraer E-170-LR aircraft, as well as 4 GE CF34-8E5 engines (the “Equipment”).
This motion is part of the Company’s measures to ensure a more efficient and homogeneous fleet, in order to ensure a viable and profitable commercial platform in the new post COVID-19 economic reality.
The July 23 hearing approved the termination of the contracts in agreement with the Company’s request. Aeromexico will follow the guidelines authorized by the Court and the logistical aspects agreed with the lessors for the orderly return of the Equipment. This will reduce costs associated with the leasing and maintenance of the Equipment and is part of the efforts to rationalize the fleet of its subsidiaries that operate under the Aeromexico and Aeromexico Connect brands.
The Company called the court decision “positive,” which has no effect on the Company’s network plan or frequencies. In addition to strengthening the Company’s operation towards a more profitable and sustainable future the lease rejection, the Company explained, will contribute to the business plan which is being reviewed by management, supported by operational and financial advisers.
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors were estimated to have consolidated assets and liabilities of $1 billion to $10 billion.
Grupo Aeromexico, S.A.B. de C.V. is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Mexico’s global airline has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe.
At the time of filing, the Group’s operating fleet of 119 aircraft is comprised of Boeing 787 and 737 jet airliners and Embraer 170 and 190 models. Aeromexico is a founding member of the SkyTeam airline alliance, which celebrated its 20th anniversary, and serves in 170 countries by the 19 SkyTeam airline partners. Aeromexico created and implemented a Health and Sanitization Management System (HSMS) to protect its customers and employees at all steps of its operations.
Davis Polk & Wardwell LLP and Cervantes Sainz are acting as Aeromexico’s legal counsel, Rothschild & Co. is acting as financial advisor, and AlixPartners, LLP is serving as restructuring advisor to the Company. Epiq Bankruptcy Solutions is the claims agent.