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LAXintl
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Interjet put up for sale

Thu Jul 04, 2019 9:01 pm

Miguel Alemán Velasco, president and owner of Interjet, has announced that he plans to sell the loss-making airline in an effort to help pay accumulated debts which sits at 7.9 times its ebitdar.

While the Mexican government recently granted the company a credit guarantee of $150 million dollars for 5-years, higher oil prices, airport charges and cost related to 17 grounded Sukhoi SSJ-100, has made the viability of the company questionable.

Interjet CEO says the company has held talks with other airlines, while some in Mexico feel as a merger with Volaris or Viva Aerobús would be an option.

Owner of Interjet announces that it plans to sell its airline
https://www.reportur.com/mexico/2019/07 ... aerolinea/

=

The elimination of a player in Mexico would benefit other players as the market does have over capacity, and Interjet has long been the weaker player sitting in a difficult spot being neither a proper LCC nor full-service carrier.
From the desert to the sea, to all of Southern California
 
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UPlog
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Re: Interjet put up for sale

Thu Jul 04, 2019 9:23 pm

Have these guys ever made money, or always been loss-making? Guess being a private company things are not too transparent.
 
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janders
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Re: Interjet put up for sale

Thu Jul 04, 2019 11:00 pm

Their business model puts them in no man's land. They earn LCC fares, but have low-density aircraft (150 seats on A320). Even JetBlue learned densification is a critical step.

Also telling is that they have had 2 failed IPO attempts. Obviously, the market is not buying the prospects either.
"We make war that we may live in peace." -- Aristotle
 
SocalApproach
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Re: Interjet put up for sale

Thu Jul 04, 2019 11:41 pm

janders wrote:
Their business model puts them in no man's land. They earn LCC fares, but have low-density aircraft (150 seats on A320). Even JetBlue learned densification is a critical step.

Also telling is that they have had 2 failed IPO attempts. Obviously, the market is not buying the prospects either.


What a shame. And the low density config is another reason Interjet is above and beyond a better experience than Volaris or VivaAerobus. Funny how it always seems to come down to this though. The consumer appreciates a better product but they aren't willing to pay for it
 
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mercure1
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Re: Interjet put up for sale

Fri Jul 05, 2019 3:15 am

So the billionaire finally turned into a millionaire.

While many have complimented the airline for service, its clear the business model is not sustainable. In addition, things like the SSJ was a terrible distraction for the airline.
mercure f-wtcc
 
MaksFly
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Re: Interjet put up for sale

Fri Jul 05, 2019 3:33 am

And there we go.... the excuses finally end.

Pure and simple... either poor execution or a poor business model.
 
ShamrockBoi330
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Re: Interjet put up for sale

Fri Jul 05, 2019 3:38 am

mercure1 wrote:
So the billionaire finally turned into a millionaire.

While many have complimented the airline for service, its clear the business model is not sustainable. In addition, things like the SSJ was a terrible distraction for the airline.


Yes, have flown them many times from Toronto to Mexico and would easily say they are the best on the route, beat any of the Canadian airlines hands down and will always be by number 1 choice, as long as they stay around!
 
BuildingMyBento
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Re: Interjet put up for sale

Fri Jul 05, 2019 3:52 am

I don't find any difference in soft product between them, Volaris, and Viva. Actually, I prefer Volaris because GDL is a much more tolerable transfer than MEX. Guadalajara is a pleasant city, too.
 
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Pudelhund
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Re: Interjet put up for sale

Fri Jul 05, 2019 4:04 am

I don't understand their business model in a market like Mexico. If you are B6 flying between NY/CA/FL, those route distances and affluent customers make a more premium product attractive - and even they apparently have started walking back the low density cabin. But a much shorter haul airline flying even more price conscious passengers in a market with tons of new budget airline capacity? It never made sense to me.
 
Italianflyer
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Re: Interjet put up for sale

Fri Jul 05, 2019 10:50 am

I wonder if they would fit into the Indigo Partners stable of holdings. Especially given IPs investment in Volaris.
 
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longhauler
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Re: Interjet put up for sale

Fri Jul 05, 2019 12:41 pm

ShamrockBoi330 wrote:
mercure1 wrote:
So the billionaire finally turned into a millionaire.

While many have complimented the airline for service, its clear the business model is not sustainable. In addition, things like the SSJ was a terrible distraction for the airline.


Yes, have flown them many times from Toronto to Mexico and would easily say they are the best on the route, beat any of the Canadian airlines hands down and will always be by number 1 choice, as long as they stay around!


I flew them from IAH to MEX (to ride on a SSJ) then MEX to YYZ. Yes, they easily have the best cabin service in North America. But ....

If the passenger is not willing to pay a premium for that service, it becomes a detriment. It is simple aviation economics. Sad. If they had packed in seats and gave minimal service (at a cost) they’d be like every other North American Airline, but possibly profitable.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
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janders
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Re: Interjet put up for sale

Fri Jul 05, 2019 9:23 pm

Italianflyer wrote:
I wonder if they would fit into the Indigo Partners stable of holdings. Especially given IPs investment in Volaris.


Not sure Indigo wants two airlines in same market that would compete against each other (remember they sold Spirit before investing into Frontier), while I don't know what Mexican competition authorities would say if carriers were merged.
"We make war that we may live in peace." -- Aristotle
 
slcdeltarumd11
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Re: Interjet put up for sale

Fri Jul 05, 2019 9:28 pm

I feel like the SSJ is an easy out, but this airline wasn't going to make it anyway.
 
usflyer msp
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Re: Interjet put up for sale

Sat Jul 06, 2019 1:43 am

4O's problem is actually the lack of slots at MEX. MEX might be able to support a premium LCC - the rest of Mexico definitely cant. 4O's business plan got messed up when MEX ran out of slots and they had to shift capacity elsewhere - places that really can't support their business model.
 
santi319
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Re: Interjet put up for sale

Sat Jul 06, 2019 2:22 am

usflyer msp wrote:
4O's problem is actually the lack of slots at MEX. MEX might be able to support a premium LCC - the rest of Mexico definitely cant. 4O's business plan got messed up when MEX ran out of slots and they had to shift capacity elsewhere - places that really can't support their business model.

Thats absolutely not true, as their numbers in MEX were marginal compared to the other airlines....

So they wanted more slots to... lose more money?
 
usflyer msp
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Re: Interjet put up for sale

Sat Jul 06, 2019 4:30 am

santi319 wrote:
usflyer msp wrote:
4O's problem is actually the lack of slots at MEX. MEX might be able to support a premium LCC - the rest of Mexico definitely cant. 4O's business plan got messed up when MEX ran out of slots and they had to shift capacity elsewhere - places that really can't support their business model.

Thats absolutely not true, as their numbers in MEX were marginal compared to the other airlines....

So they wanted more slots to... lose more money?


I would argue they never were able to get the critical mass they needed in MEX because of the slot issues which negatively affected their results there.
 
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KrustyTheKlown
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Re: Interjet put up for sale

Sat Jul 06, 2019 6:04 am

LAXintl wrote:
....
While the Mexican government recently granted the company a credit guarantee of $150 million dollars for 5-years, higher oil prices, airport charges and cost related to 17 grounded Sukhoi SSJ-100, has made the viability of the company questionable.
...


That credit guarantee comes from an export credit agency (Bancomext) and at least part of it was reportedly earmarked to fix and sell their grounded SSJ-100, but I really doubt there's anybody interested in buying a second hand SSJ-100 fleet and so this becomes a problem for selling the airline.

However, as I cannot find a reputable source confirming that Interjet is indeed for sale it may be wise to consider this as a rumor.
 
Sancho
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Re: Interjet put up for sale

Wed Jul 24, 2019 10:35 pm

Looks like the situation for Interjet is getting worse, according to the article they have not payed for navigation fees to the mexican government:

https://www.elfinanciero.com.mx/empresa ... s-del-inai

Sancho
 
SkyVoice
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Re: Interjet put up for sale

Thu Jul 25, 2019 5:37 am

Are Interjet's A320s owned or leased? If they own them, they might get some good offers for them. I'm convinced that the Sukhoi SSJs are jinxed, regardless of who owns them!
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