Photo: Daniel Martinez Garbuno
Aeromexico had a US$138 million net loss during 2021’s second quarter, according to the latest financial report published by the airline. While Aeromexico’s financial performance is improving, there’s still a long way to go before it can reach profitability again.
Looking at Aeromexico’s results
Aeromexico’s total revenue during the quarter was nearly US$500 million, a 40.5% decrease compared to the income it had during the same period in 2019. Nevertheless, it was also a 46.2% increase compared to 2021’s first quarter.
The Mexican carrier says the increase was “primarily driven by a sequential recovery in domestic and international markets.”
Total capacity (measured in ASKs) decreased 39.2% compared to the second quarter of 2019. However, ASKs increased 9.0% compared to the first quarter of 2021. International capacity increased by 7.2%, and domestic capacity was raised by 11.4%.
Meanwhile, Aeromexico’s EBITDAR for the period amounted to a positive US$95 million. That’s the first positive EBITDAR the airline has had since 2020’s first quarter.
Nevertheless, Aeromexico couldn’t avoid the red numbers. Aeromexico had a US$138 million net loss. The last time the carrier had a net revenue was during 2019’s third quarter when it generated approximately US$3 million.
Aeromexico is increasing its fleet
Despite the loss, Aeromexico is looking to increase its fleet size. Yesterday, the Mexican carrier announced that it had signed a letter of intent with Dubai Aerospace Enterprise (DAE). The airline wants to take delivery of up to 12 new Boeing 737 MAX aircraft.
Aeromexico filed the document with the New York bankruptcy court, and it is waiting for its approval. If it happens, the airline would receive its first 737 MAX from DAE as early as October 2021.
Following the renegotiation with Boeing that halved the original B737 MAX order, Aeromexico is set to receive up to 40 new aircraft in the next few years.
The airline will take delivery of 32 Boeing 737 MAX aircraft (20 from Boeing and 12 from Dubai Aerospace), four Boeing 737-800, and four Boeing 787-9 Dreamliner.
In the meantime, it will reject the leasing contracts of several aircraft, including its five remaining Boeing 737-700.
As of June 30, Aeromexico had a fleet of 118 aircraft. The average age was 8.9 years. During the second quarter, the carrier received four Boeing 737-800s, four 737 MAX 8s, and four 737 MAX 9s.
Currently, Aeromexico’s fleet comprises 18 B787, five B737-700, 34 B737-800, ten B737 MAX 8, four B737 MAX 9, and 47 Embraer E190.
What about Aeromexico’s Chapter 11?
It’s been over a year now that Aeromexico filed for a Chapter 11 bankruptcy in the US. The carrier has withdrawn all its Debtor-In-Possession funding, worth $US1 billion. Aeromexico’s cash position at the end of the quarter was approximately US$963 million.
Currently, the airline is working on its reorganization plan. It intends to file it by September and could exit the bankruptcy process before the year ends. LATAM and Avianca have similar plans.
On June 30, Delta Air Lines announced it intends to exercise its call option and purchase US$185 million of Aeromexico’s debt.
Finally, on July 9, Mexican shareholders announced their intention to participate in the new equity that Aeromexico will issue.
