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Ishrion
Posts: 2564
Joined: Mon Feb 04, 2019 6:17 am

Re: Rumor: Aeroméxico to file for Chapter 11

Tue Jun 30, 2020 11:49 pm

Ishrion wrote:
Soooo... relating to Delta...
- JV partner Virgin Australia enters administration
- 20% stake in LATAM - Ch. 11 Bankruptcy
- 49% stake in Virgin Atlantic - Expected to enter administration
- 49% stake in Aeromexico - Expected to file for Ch. 11 bankruptcy.

Unfortunate.


And there we go, Aeromexico fell through.

Though... Virgin Australia found a buyer and Virgin Atlantic is apparently about to get a bailout or something.
 
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LAXintl
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Re: Updated: Aeroméxico files for Chapter 11

Tue Jun 30, 2020 11:51 pm

English version of their reorganization site is now live.

https://vuela.aeromexico.com/reorganizacion/?en
From the desert to the sea, to all of Southern California
 
dcajet
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Re: Updated: Aeroméxico files for Chapter 11

Tue Jun 30, 2020 11:52 pm

Wow... Latin America's 3 largest airlines in Ch.11. Brutal.
Keep calm and wash your hands.
 
Ishrion
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Re: Updated: Aeroméxico files for Chapter 11

Tue Jun 30, 2020 11:53 pm

Does anyone know Aeromexico's financials in the past few years? Were they seeing losses?
 
T4thH
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:04 am

Ishrion wrote:
Does anyone know Aeromexico's financials in the past few years? Were they seeing losses?

Yes, they saw losses as all of them. The only one who was on a good way and reducing the losses to a minimum was Interjet. But Interjet was also the airline which had accumulate the highest number of debts.
 
MIflyer12
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:13 am

Ishrion wrote:
Does anyone know Aeromexico's financials in the past few years? Were they seeing losses?


https://www.marketwatch.com/investing/s ... financials
 
kondoo
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:16 am

How does DL's investment get treated in a CH11?
 
Boof02671
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:20 am

kondoo wrote:
How does DL's investment get treated in a CH11?

More than likely the current stock gets wiped out in bankruptcy and Delta will lose their investment.
 
danipawa
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:21 am

oh well...welcome..
 
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ikolkyo
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 2:06 am

DL investment airlines seem to be doing well...
 
bcbhokie
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 2:11 am

I don't see how Mexico is going to have a viable national full service carrier until CDMX has a viable airport.

AeroMexico should be positioned as an industry leader for connections between the Americas - the geographic location is perfect. But the gnarly immigration process makes transit a hassle, MEX T2 looks 20 years older than it actually is, and capacity is a perpetual issue.

Without the ability to serve connecting traffic, AeroMexico is perpetually going to lose out to other airlines' one-flight-a-day from their home countries to MEX, and without an international operation, the domestic ops won't be competitive with LCCs.
 
bcbhokie
Posts: 187
Joined: Fri Sep 24, 2004 7:30 am

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 2:16 am

ikolkyo wrote:
DL investment airlines seem to be doing well...


This is a common refrain around here lately, but I don't think the strategy was bad overall. Delta has been a value investor in other airlines - they have consistently stepped in to make investments in struggling carriers that unlock value by bringing their expertise in operations and revenue management to help them recover.

Delta isn't investing in blue chips - they're the airline equivalent of Flip-or-Flop. These plans take time to bear fruit, and it's pretty plainly apparent that a struggling carrier will be the first to experience the effects of a global crisis.

LATAM was particularly gnarly since the failure happened so rapidly after the deal was struck, but even with the finances wiped out, Delta still gets a new partner and prevents AA from continuing their dominant relationship with them.

Don't count out Delta yet - who knows, maybe the bankruptcy process will create some interesting opportunities to forge an AM/LA/DL three way partnership?
 
deltairlines
Posts: 7010
Joined: Mon May 24, 1999 4:47 am

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 2:25 am

bcbhokie wrote:
I don't see how Mexico is going to have a viable national full service carrier until CDMX has a viable airport.

AeroMexico should be positioned as an industry leader for connections between the Americas - the geographic location is perfect. But the gnarly immigration process makes transit a hassle, MEX T2 looks 20 years older than it actually is, and capacity is a perpetual issue.

Without the ability to serve connecting traffic, AeroMexico is perpetually going to lose out to other airlines' one-flight-a-day from their home countries to MEX, and without an international operation, the domestic ops won't be competitive with LCCs.


Not to mention that T2 is on the other side of the field from the principle business areas of Polanco, Santa Fe and the high rises of Reforma. There have been plenty of times going from T2 to the Circuito (or vice versa) where it would take me a good 20 minutes to go a kilometer. The roundabout in front of Terminal 2 is an awful chokepoint trying to get to the airport for a 330p flight on a Friday (which was my commute for a year and a half).

Towards the end of my time in MEX, I was primarily flying out of Terminal 1. It was such a better experience than Terminal 2.
 
sxf24
Posts: 991
Joined: Wed Aug 15, 2007 12:22 pm

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 2:33 am

bcbhokie wrote:
ikolkyo wrote:
DL investment airlines seem to be doing well...


This is a common refrain around here lately, but I don't think the strategy was bad overall. Delta has been a value investor in other airlines - they have consistently stepped in to make investments in struggling carriers that unlock value by bringing their expertise in operations and revenue management to help them recover.

Delta isn't investing in blue chips - they're the airline equivalent of Flip-or-Flop. These plans take time to bear fruit, and it's pretty plainly apparent that a struggling carrier will be the first to experience the effects of a global crisis.

LATAM was particularly gnarly since the failure happened so rapidly after the deal was struck, but even with the finances wiped out, Delta still gets a new partner and prevents AA from continuing their dominant relationship with them.

Don't count out Delta yet - who knows, maybe the bankruptcy process will create some interesting opportunities to forge an AM/LA/DL three way partnership?


You don’t need to flush billions of dollars down the drain to get a partner.
 
dstblj52
Posts: 385
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 2:40 am

sxf24 wrote:
bcbhokie wrote:
ikolkyo wrote:
DL investment airlines seem to be doing well...


This is a common refrain around here lately, but I don't think the strategy was bad overall. Delta has been a value investor in other airlines - they have consistently stepped in to make investments in struggling carriers that unlock value by bringing their expertise in operations and revenue management to help them recover.

Delta isn't investing in blue chips - they're the airline equivalent of Flip-or-Flop. These plans take time to bear fruit, and it's pretty plainly apparent that a struggling carrier will be the first to experience the effects of a global crisis.

LATAM was particularly gnarly since the failure happened so rapidly after the deal was struck, but even with the finances wiped out, Delta still gets a new partner and prevents AA from continuing their dominant relationship with them.

Don't count out Delta yet - who knows, maybe the bankruptcy process will create some interesting opportunities to forge an AM/LA/DL three way partnership?


You don’t need to flush billions of dollars down the drain to get a partner.

In most of these cases, they actually did Virgin Atlantic only became a delta partner after they bought the 49% owned by Singapore airlines. Latam left what was in all honestly a better strategic partner for the money delta offered and the ability to offload aircraft. Aeromexico had a lot of issues and was pretty clearly an airline delta was trying to fix up and tellingly they never bought a stake in virgin australia.
 
atcanobbio
Posts: 53
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 8:22 am

dcajet wrote:
Wow... Latin America's 3 largest airlines in Ch.11. Brutal.


not really surprising that the LA3 are in voluntary Ch11. I believe that once two of them went for it, it was a matter of time AM did.
 
guillelds
Posts: 69
Joined: Sat Aug 07, 2010 4:20 am

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 9:11 am

Who is next in queue? Make your bets !!! Mine is for either Gol or Azul... and why not CM
 
LawAndOrder
Posts: 261
Joined: Tue Oct 27, 2015 1:56 pm

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 11:15 am

Boof02671 wrote:
kondoo wrote:
How does DL's investment get treated in a CH11?

More than likely the current stock gets wiped out in bankruptcy and Delta will lose their investment.


Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?
 
LawAndOrder
Posts: 261
Joined: Tue Oct 27, 2015 1:56 pm

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 11:16 am

sxf24 wrote:
bcbhokie wrote:
ikolkyo wrote:
DL investment airlines seem to be doing well...


This is a common refrain around here lately, but I don't think the strategy was bad overall. Delta has been a value investor in other airlines - they have consistently stepped in to make investments in struggling carriers that unlock value by bringing their expertise in operations and revenue management to help them recover.

Delta isn't investing in blue chips - they're the airline equivalent of Flip-or-Flop. These plans take time to bear fruit, and it's pretty plainly apparent that a struggling carrier will be the first to experience the effects of a global crisis.

LATAM was particularly gnarly since the failure happened so rapidly after the deal was struck, but even with the finances wiped out, Delta still gets a new partner and prevents AA from continuing their dominant relationship with them.

Don't count out Delta yet - who knows, maybe the bankruptcy process will create some interesting opportunities to forge an AM/LA/DL three way partnership?


You don’t need to flush billions of dollars down the drain to get a partner.


So flushing billions down the drain by becoming the most profitable airline. It’s a pandemic no one could have prepared for this. Even with their investments Delta doesn’t seem to be hurting in comparison to UA or AA especially.
 
MIflyer12
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 11:44 am

bcbhokie wrote:
Delta isn't investing in blue chips - they're the airline equivalent of Flip-or-Flop. These plans take time to bear fruit, and it's pretty plainly apparent that a struggling carrier will be the first to experience the effects of a global crisis.


That may be a fair analogy but DL has plowed a lot of money into this international equity strategy:

$620 Million here (Aeromexico)
$2.25 Billion there (LATAM)
$360 Million for the Virgin Atlantic stake
$450 Million for China Eastern
$300(?) Million for Korean Air
$438 Million with AFKL

source: Google searches - which may have missed subsequent stake increases

VS I understood as strategic: LON slots and point of sale. It's a markte very important to a lot of corporate clients. One might think of AFKL as a necessary stabilizer to the largest TATL JV partner. I can't figure how they got a Net Present Value of $2.25 Billion or more out of a prospective stream of incremental earnings in LATAM when they already had the two biggest Latin American markets engaged with AM and Gol. The Chilean courts had already blocked a LATAM/AA JV - DL didn't need to spend $0.01 to do that.

Like I said, $4.4 Billion is a lot of money. AA had a net free cash flow of -$1.0 Billion for the period 2015-2019, inclusive. https://www.marketwatch.com/investing/s ... /cash-flow
 
airhansa
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:24 pm

LawAndOrder wrote:
Boof02671 wrote:
kondoo wrote:
How does DL's investment get treated in a CH11?

More than likely the current stock gets wiped out in bankruptcy and Delta will lose their investment.


Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?


In CH11, Delta actually has some say in how the company may be eventually run, though limited and it has less power in some situations.

In CH7, shareholders are low on the queue of people waiting to get their money back from asset sales so usually end up with nothing.
 
usflyer msp
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:42 pm

LawAndOrder wrote:
Boof02671 wrote:
kondoo wrote:
How does DL's investment get treated in a CH11?

More than likely the current stock gets wiped out in bankruptcy and Delta will lose their investment.


Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?


...because that is what happens in the vast majority of CH11 filings in general and in every successful CH11 airline reorganization in history.
 
LawAndOrder
Posts: 261
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:53 pm

usflyer msp wrote:
LawAndOrder wrote:
Boof02671 wrote:
More than likely the current stock gets wiped out in bankruptcy and Delta will lose their investment.


Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?


...because that is what happens in the vast majority of CH11 filings in general and in every successful CH11 airline reorganization in history.


Examples please. Furthermore delta and Aeromexico are too closely embedded for their investment to just go to waste. DL is strategic in ensuring the barriers of entry are harder for others to step in and difficult for the airlines to separate.

Airliners Comments these days make it seem like Delta is doomed. No one has knowledge or precedents for this situation, as none of us have encountered this before. Now back to AM can we stop bringing up DL in every thread. There are several items we can discuss other than DL investment.
 
Boof02671
Posts: 1973
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 12:54 pm

LawAndOrder wrote:
Boof02671 wrote:
kondoo wrote:
How does DL's investment get treated in a CH11?

More than likely the current stock gets wiped out in bankruptcy and Delta will lose their investment.


Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?

I lived it. Two bankruptcies at US Airways. DL’s investment is stock. Stock normally gets canceled upon emerging bankruptcy and a new stock is issued. Previous stockholders lose their investment as stock is not guaranteed nor considered a creditor.
 
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Polot
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 1:00 pm

LawAndOrder wrote:
usflyer msp wrote:
LawAndOrder wrote:

Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?


...because that is what happens in the vast majority of CH11 filings in general and in every successful CH11 airline reorganization in history.


Examples please. Furthermore delta and Aeromexico are too closely embedded for their investment to just go to waste. DL is strategic in ensuring the barriers of entry are harder for others to step in and difficult for the airlines to separate.

Airliners Comments these days make it seem like Delta is doomed. No one has knowledge or precedents for this situation, as none of us have encountered this before. Now back to AM can we stop bringing up DL in every thread. There are several items we can discuss other than DL investment.

AM and DL’s close partnership will mean that AM will likely exit Chapter 11 still partners. That doesn’t mean the investment will remain intact though, because you know who else won’t want to see their investment go to waste? The parties that provide AM money during the bankruptcy. And since ownership can only go to 100% and Delta’s hands are tied when it comes to financial support DL will almost certainly have a smaller (if any) ownership chunk in AM when this is all over.

But they will still be partners, unless a rival airline gains significant ownership (unlikely).
 
enplaned
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 1:14 pm

LawAndOrder wrote:
usflyer msp wrote:
LawAndOrder wrote:

Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?


...because that is what happens in the vast majority of CH11 filings in general and in every successful CH11 airline reorganization in history.


Examples please. Furthermore delta and Aeromexico are too closely embedded for their investment to just go to waste. DL is strategic in ensuring the barriers of entry are harder for others to step in and difficult for the airlines to separate.

Airliners Comments these days make it seem like Delta is doomed. No one has knowledge or precedents for this situation, as none of us have encountered this before. Now back to AM can we stop bringing up DL in every thread. There are several items we can discuss other than DL investment.


Almost every US airline bankruptcy has ended with equity wiped out. To give you an idea of how profound that is, value would only go to pre-bankruptcy equity to the extent that unsecured creditors were paid out at 100 cents on the dollar. In one of the US Airways bankruptcies after 9/11, unsecured creditors got 2 cents on the dollar.

It's easier to point out those that were an exception. One such exception was the post-9/11 bankruptcy of Hawaiian Air. Equity was not wiped out in that bankruptcy. But that's the exception, not the rule.

UAL shares worthless:

https://www.latimes.com/archives/la-xpm ... story.html

Delta shares worthless:

https://www.deseret.com/2006/3/16/19943 ... -worthless

Northwest shares worthless:

https://www.cfo.com/banking-capital-mar ... ankruptcy/

Looks like the old American Airlines shares turned out to be worth something due to value-creation from the merger with US Airways, plus reducing costs in Ch 11:

https://www.star-telegram.com/news/busi ... 36732.html

But note - they were going to get something like 3.5% of the equity in the new American Airlines. And if the merger with US Airways hadn't happened, they'd have gotten nothing.
 
Boof02671
Posts: 1973
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 1:16 pm

Polot wrote:
LawAndOrder wrote:
usflyer msp wrote:

...because that is what happens in the vast majority of CH11 filings in general and in every successful CH11 airline reorganization in history.


Examples please. Furthermore delta and Aeromexico are too closely embedded for their investment to just go to waste. DL is strategic in ensuring the barriers of entry are harder for others to step in and difficult for the airlines to separate.

Airliners Comments these days make it seem like Delta is doomed. No one has knowledge or precedents for this situation, as none of us have encountered this before. Now back to AM can we stop bringing up DL in every thread. There are several items we can discuss other than DL investment.

AM and DL’s close partnership will mean that AM will likely exit Chapter 11 still partners. That doesn’t mean the investment will remain intact though, because you know who else won’t want to see their investment go to waste? The parties that provide AM money during the bankruptcy. And since ownership can only go to 100% and Delta’s hands are tied when it comes to financial support DL will almost certainly have a smaller (if any) ownership chunk in AM when this is all over.

But they will still be partners, unless a rival airline gains significant ownership (unlikely).

Delta will lose its investment. Their investment is stock, and stock ownership isn’t considered a creditor.

And Delta can’t invest any money into AM as the CARES Act prohibits it.
 
usflyer msp
Posts: 3662
Joined: Tue May 23, 2000 11:50 am

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 1:57 pm

LawAndOrder wrote:
usflyer msp wrote:
LawAndOrder wrote:

Where did you get this info from? Is there proof that they will loose there investment or is this just airliners hype? How can you be sure that they don’t have agreements in place/ aren’t working to ensure they don’t loose their investment?


...because that is what happens in the vast majority of CH11 filings in general and in every successful CH11 airline reorganization in history.


Examples please. Furthermore delta and Aeromexico are too closely embedded for their investment to just go to waste. DL is strategic in ensuring the barriers of entry are harder for others to step in and difficult for the airlines to separate.

Airliners Comments these days make it seem like Delta is doomed. No one has knowledge or precedents for this situation, as none of us have encountered this before. Now back to AM can we stop bringing up DL in every thread. There are several items we can discuss other than DL investment.


The examples have already been given but just from a logical standpoint - what is the point of bankruptcy if ownership stays the same? So the creditors should lose a ton of money while the owners lose nothing? That is not fair or realistic.
 
deltairlines
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 3:21 pm

One thing to keep in mind is that AM's Chief Commercial Officer (the number two in the company) is Nicolas Ferri, who "came" (and I use this term very loosely but will not go into more detail) from Delta (basically he just moved his office down the hall at AM's headquarters as he had been based in MEX for a few years). James Sarvis is AM's Chief Operating Officer as well and also is a Delta guy.

Add in the fact that Delta and AeroMexico have anti-trust on the transborder for at least a couple more years and Delta will still have a sphere of influence at AM.
 
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Gonzalo
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Re: Rumor: Aeroméxico to file for Chapter 11

Wed Jul 01, 2020 3:22 pm

LAXintl wrote:



Not a big surprise considering the Pandemic is not improving and the effects in this part of the world are more and more catastrophic day by day.
Governments mishandled this health crisis from day one, wasting valuable experiences from Europe and Asia re the pandemic. They should do much more to help airlines with soft loans and direct cash injections, but instead they are looking to the floor like the dogs after doing something bad.
By the way, governments elected by the people in free elections....We never learn...

Rgds.
G.
Gear Up!!: DC-3 / EMB-110 / FH-227 / A318-19-20-21 / B732 / B763 / B789 / B788 / A343 / ATR72-600
 
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lightsaber
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 4:30 pm

Folks, this is an AeroMexico thread. Please only discuss their partner airlines as to how it impacts AeroMexico.
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
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KrustyTheKlown
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 4:48 pm

According to airfleets.net AM currently operates the following aircraft:

737: 49 (of which 6 are MAX-8)
787: 19
E-jets: 56 (5D, their regional affiliate)

They also have 54 737-MAX on order.

In the current environment their 787s are being used mostly for cargo as their usual transoceanic routes have banned passenger traffic from Mexico. Yet this situation is unlikely to change anytime soon as the COVID-19 health crisis in Mexico has been grossly mismanaged (the government has been forecasting that each week since early May would bring a sharp descent in contagions.. but instead each week brings a new record in contagions and fatalities thanks in part to the 2nd lowest testing rate in the continent).

Travel bans are unlikely to be suspended until a vaccine is widely available, which means that AM will have to keep parked most of their 787 until 2022 (as Mexico is not even following Brazil in securing access to a vaccine).

AM made ambitious expansion plans when the Texcoco airport was announced, but as that plan is dead now they find themselves with a large fleet they cannot use.. so I think that they will use the bankruptcy proceedings to cancel a large part of their 737MAX order and return most of their 787 to lessors.
 
Boof02671
Posts: 1973
Joined: Sun Jul 10, 2016 12:15 am

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 4:55 pm

deltairlines wrote:
One thing to keep in mind is that AM's Chief Commercial Officer (the number two in the company) is Nicolas Ferri, who "came" (and I use this term very loosely but will not go into more detail) from Delta (basically he just moved his office down the hall at AM's headquarters as he had been based in MEX for a few years). James Sarvis is AM's Chief Operating Officer as well and also is a Delta guy.

Add in the fact that Delta and AeroMexico have anti-trust on the transborder for at least a couple more years and Delta will still have a sphere of influence at AM.

When a company files bankruptcy Delta won’t have a lot of influence, that would be the role of the secured creditors committee. Investors and stock owners have the least amount of influence.
 
CMA727
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 8:43 pm

bcbhokie wrote:
I don't see how Mexico is going to have a viable national full service carrier until CDMX has a viable airport.

AeroMexico should be positioned as an industry leader for connections between the Americas - the geographic location is perfect. But the gnarly immigration process makes transit a hassle, MEX T2 looks 20 years older than it actually is, and capacity is a perpetual issue.

Without the ability to serve connecting traffic, AeroMexico is perpetually going to lose out to other airlines' one-flight-a-day from their home countries to MEX, and without an international operation, the domestic ops won't be competitive with LCCs.


CDMX does not have to worry about airport capacity at least for the middle run as demand has dramatically been reduced by COVID-19 and it´s corresponding impact in the economy.

More than a new airport, at this stage, and I am afraid for many years to come, Mexico City needs to improuve the quality of the existing facilities at MEX.

My two cents.
 
Nola
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Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 9:55 pm

The integration through the JV and benefits it provides to AM (and DL) will survive the reorganization. DL will lose it's equity, or most of it, but equity is only important in three situations: 1. voting rights (but as a 49% shareholder, DL is still a minority shareholder and cannot control the vote), 2. receiving dividends (which require either a cash reserve or profit to be disbursed), or 3. when selling the stock (which DL was unlikely to do). The purchase of shares was the price to be paid to get the JV. The JV isn't going anywhere so what DL really wanted will remain (in the case of all of its JV's, likely). I don't know if DL would also have the benefit of a tax loss on the value of the shares to take against income when DL becomes profitable again, but DL will have losses on its own for until the recovery from Covid and will not pay US federal taxes for years.
 
bcbhokie
Posts: 187
Joined: Fri Sep 24, 2004 7:30 am

Re: Updated: Aeroméxico files for Chapter 11

Wed Jul 01, 2020 11:22 pm

CMA727 wrote:
bcbhokie wrote:
I don't see how Mexico is going to have a viable national full service carrier until CDMX has a viable airport.

AeroMexico should be positioned as an industry leader for connections between the Americas - the geographic location is perfect. But the gnarly immigration process makes transit a hassle, MEX T2 looks 20 years older than it actually is, and capacity is a perpetual issue.

Without the ability to serve connecting traffic, AeroMexico is perpetually going to lose out to other airlines' one-flight-a-day from their home countries to MEX, and without an international operation, the domestic ops won't be competitive with LCCs.


CDMX does not have to worry about airport capacity at least for the middle run as demand has dramatically been reduced by COVID-19 and it´s corresponding impact in the economy.

More than a new airport, at this stage, and I am afraid for many years to come, Mexico City needs to improuve the quality of the existing facilities at MEX.

My two cents.


I do agree with you that COVID-19 means that capacity is now less of an issue. But the pandemic hasn't changed the underlying reality that the MEX airport is unsuitable for running a connecting hub, even at lower volumes - there's no sterile transit area and immigration is a fiasco, the gate areas and lounges are poor quality, and the T2 facility in particular lacks natural light despite being constructed of a jillion miniature windows.

Someone once likened the MEX T2 architecture to that of Jardine House in Hong Kong (also known as "House of a Thousand Arseholes"), and now I can't unsee the comparison.

With Texcoco off the table, unless Mexico changes leadership again soon, AM is going to need to make major, fundamental structural changes to an only 12 year old facility if they want to be competitive - but I just don't see them having the funds to invest.

The frustrating part of this is that AM is a really charming airline when they want to be. The crew are fantastic and hospitable, and the 787-9 onboard hard product is right up there with the global top tier carriers. There are even aspects of their service that are industry leading, like the amenity kits (which are weirdly fabulous!) and the onboard bar (self-pour Cuban rum, water bottle dispenser and espresso machine - yes please!). All they need to be a force to be reckoned with is a comfortable transit experience, a sane connecting schedule bank (many connections right now are 3-12 hours+!) and a few more dollars invested in improving catering.

Here's hoping that Chapter 11 gets AM the resources they need to be a real competitor.
 
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ghost77
Posts: 4564
Joined: Wed Mar 01, 2000 2:07 pm

Re: Rumor: Aeroméxico to file for Chapter 11

Thu Jul 02, 2020 3:41 am

PSU.DTW.SCE wrote:
Only reason the US airline industry isn't all running to the courthouse is because of CARES act/funding.


Wait for October 1st!

T4thH wrote:
The difference is, Etihad has actively destroyed the airlines, they have been invested in. They have tried to modify the airlines to a 100% support airline to transfer the passengers to the Ethihad hubs, for further transport with Ethihad. Ethihad has actively executed one airline after another.

The DL investment airlines got just the same illness as all airlines of the world now, perhaps with exception of some freighter airlines. They got COVID-19.


You gotta a point! All flying to DAL's hubs! But in a better scenario, this was working!

g77
 
deltairlines
Posts: 7010
Joined: Mon May 24, 1999 4:47 am

Re: Updated: Aeroméxico files for Chapter 11

Thu Jul 02, 2020 7:42 pm

Boof02671 wrote:
deltairlines wrote:
One thing to keep in mind is that AM's Chief Commercial Officer (the number two in the company) is Nicolas Ferri, who "came" (and I use this term very loosely but will not go into more detail) from Delta (basically he just moved his office down the hall at AM's headquarters as he had been based in MEX for a few years). James Sarvis is AM's Chief Operating Officer as well and also is a Delta guy.

Add in the fact that Delta and AeroMexico have anti-trust on the transborder for at least a couple more years and Delta will still have a sphere of influence at AM.

When a company files bankruptcy Delta won’t have a lot of influence, that would be the role of the secured creditors committee. Investors and stock owners have the least amount of influence.


I never said Delta itself won't have a lot of influence. However, fact is that two of the guys on AeroMexico's executive team have very strong ties to Delta that one would need to dig very deep to see how strong those ties are (moreso than you can easily find here on A.net or just through a casual Google search).
 
Boof02671
Posts: 1973
Joined: Sun Jul 10, 2016 12:15 am

Re: Updated: Aeroméxico files for Chapter 11

Thu Jul 02, 2020 7:48 pm

deltairlines wrote:
Boof02671 wrote:
deltairlines wrote:
One thing to keep in mind is that AM's Chief Commercial Officer (the number two in the company) is Nicolas Ferri, who "came" (and I use this term very loosely but will not go into more detail) from Delta (basically he just moved his office down the hall at AM's headquarters as he had been based in MEX for a few years). James Sarvis is AM's Chief Operating Officer as well and also is a Delta guy.

Add in the fact that Delta and AeroMexico have anti-trust on the transborder for at least a couple more years and Delta will still have a sphere of influence at AM.

When a company files bankruptcy Delta won’t have a lot of influence, that would be the role of the secured creditors committee. Investors and stock owners have the least amount of influence.


I never said Delta itself won't have a lot of influence. However, fact is that two of the guys on AeroMexico's executive team have very strong ties to Delta that one would need to dig very deep to see how strong those ties are (moreso than you can easily find here on A.net or just through a casual Google search).

Bankruptcy is a whole different world. The company can submit a POR or any investor, the Secured Creditors Committee has to approve as well as the judge.

For exampl when AA filed bankruptcy the company aka Horton submitted a plan as well as US and Parker and we all know which plan prevailed.
 
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LAXintl
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Re: Updated: Aeroméxico files for Chapter 11

Fri Jul 03, 2020 8:37 pm

Its pretty shocking news that AM entered BK with no DIP financing lined up!
Normally that is one of the key things arranged before filing so you have an idea of what the outcome target is and that you have money lined up to keep the operation running during Ch11.

Per filing:
Aeromexico remains in talks to obtain DIP financing as part of the restructuring process. Aeromexico is confident that it will finalize formal commitments for DIP financing that, along with available cash, would provide sufficient liquidity to meet its obligations going forward.
From the desert to the sea, to all of Southern California
 
nine4nine
Posts: 597
Joined: Tue Mar 28, 2017 3:44 pm

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 5:17 pm

Aeromexico to shed 19 aircraft from the fleet.

-All 9 E170
-5 of 11 Boeing 737-700’s
-5 of 35 737-800’s
717, 727-100, 727-200, 732, 733, 734, 735, 73G, 738, 739, 742, 748, 752, 753, 762, 763, 772, 77W, 787-10, DC9, MD80/88/90, DC10, 319, 220-300, 320, 321, 321n, 332, 333, CS100, CRJ200, Q400, E175, E190, ERJ145, EMB120
 
FSDan
Posts: 3203
Joined: Mon Jan 03, 2011 5:27 pm

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 5:26 pm

nine4nine wrote:
Aeromexico to shed 19 aircraft from the fleet.

-All 9 E170
-5 of 11 Boeing 737-700’s
-5 of 35 737-800’s


Do they need to hold onto the 6 737-700s for operational reasons (any routes where the 738 would be weight-restricted out of MEX?)? If not, I assume the 10 retiring 737s split across the -700 and -800 fleets were next up for heavy maintenance or something?
This is my signature until I think of a better one.
 
bmibaby737
Posts: 1621
Joined: Sun Jun 12, 2005 1:07 am

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 5:37 pm

nine4nine wrote:
Aeromexico to shed 19 aircraft from the fleet.

-All 9 E170
-5 of 11 Boeing 737-700’s
-5 of 35 737-800’s


Is there a website that filings that detail these sort of things can be viewed, please? I remember years ago you could access all the different documents for various airlines chapter 11 documents
 
jbs2886
Posts: 2315
Joined: Wed Apr 01, 2015 9:07 pm

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 6:01 pm

bmibaby737 wrote:
nine4nine wrote:
Aeromexico to shed 19 aircraft from the fleet.

-All 9 E170
-5 of 11 Boeing 737-700’s
-5 of 35 737-800’s


Is there a website that filings that detail these sort of things can be viewed, please? I remember years ago you could access all the different documents for various airlines chapter 11 documents


https://dm.epiq11.com/case/aeromexico/dockets

Just google "Aeromexico bankruptcy docket"
 
bmibaby737
Posts: 1621
Joined: Sun Jun 12, 2005 1:07 am

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 7:15 pm

jbs2886 wrote:
bmibaby737 wrote:
nine4nine wrote:
Aeromexico to shed 19 aircraft from the fleet.

-All 9 E170
-5 of 11 Boeing 737-700’s
-5 of 35 737-800’s


Is there a website that filings that detail these sort of things can be viewed, please? I remember years ago you could access all the different documents for various airlines chapter 11 documents


https://dm.epiq11.com/case/aeromexico/dockets

Just google "Aeromexico bankruptcy docket"


Fantastic, thank you!
 
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lightsaber
Moderator
Posts: 19581
Joined: Wed Jan 19, 2005 10:55 pm

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 8:21 pm

jbs2886 wrote:
bmibaby737 wrote:
nine4nine wrote:
Aeromexico to shed 19 aircraft from the fleet.

-All 9 E170
-5 of 11 Boeing 737-700’s
-5 of 35 737-800’s


Is there a website that filings that detail these sort of things can be viewed, please? I remember years ago you could access all the different documents for various airlines chapter 11 documents


https://dm.epiq11.com/case/aeromexico/dockets

Just google "Aeromexico bankruptcy docket"

Specifically, Docket #52. A facinating read. It includes 3 leased engines for the E-170s too.

I'm surprised so few.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
MIflyer12
Posts: 7608
Joined: Mon Feb 18, 2013 11:58 pm

Re: Updated: Aeroméxico files for Chapter 11

Mon Jul 06, 2020 9:00 pm

What's the likely fate of a bunch of 15-18 year old 737s and E170s?

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