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U.S. Court Authorizes Aeroméxico to Return 19 Leased Aircraft
According to Financial Post, a U.S. judge has granted Mexican airline Aeroméxico the right to return at least 19 leased aircraft and 4 engines as part of its bankruptcy restructuring process, according to court documents published on Thursday.
The aircraft that will be returned are five Boeing 737-800, five Boeing 737-700 and nine Embraer E-170-LR, whilst four General Electric CF34-8E5 engines will also be returned. These aircraft represent around 15% of Aeroméxico’s current fleet.
In a statement, the Mexican carrier reported that on July 3, it submitted a request to the New York Bankruptcy Court to terminate certain leases in advance that involve the orderly return of aircraft to their respective lessors. Aeroméxico requested to the U.S. Court the dissolution of 23 aircraft lease contracts: ten from Aeroméxico and 13 from Aeroméxico Connect, as part of its debt restructuring process.
According to Reuters, the United States Bankruptcy Court Southern District of New York said Aeromexico was “authorized to reject the leases for the excess leased equipment to the lessors”.
According to A21, the aircraft’s lessors will have 15 days to recover them. Otherwise, each lessor will be responsible for the storing costs of this equipment and other costs determined by the Debtors (Grupo Aeroméxico SAB), including insurance and maintenance.
As Aeroméxico informed the U.S. Court, the airline has an aircraft lease expense of $1.3 billion and pays for a hundred aircraft around $36 million per month.
ALNNEWS informed that the return of the aircraft has no impact on the strategic frequencies and destinations program and plan, and strengthens the carrier operations towards a profitable and sustainable future.
According to Simple Flying, before entering into Chapter 11, the Mexican carrier was operating 68 planes to 88 destinations throughout Mexico, America, Europe, and Asia. The airline now operates a predominantly Boeing 737 and Boeing 787 fleet.
Forbes mentioned that Aeroméxico’s fleet was formed by 126 aircraft, which 25 are owned and the other 101 are divided into 96 leased units under a standard operating lease and five more are under a Japanese operating lease, where Japanese shareholders are the owners and have purchase options.
As previously announced, the Aeroméxico parent group, Grupo Aeroméxico SAB., has voluntarily opted to further its restructuring via the Chapter 11 bankruptcy process, becoming the third Latin American airline to file this procedure. Aeroméxico has had a rough time with the coronavirus causing its aircraft to be grounded. This caused a 90% drop in commercial traffic and a lack of a bailout from the government has forced the airline to look for desperate ways to cut spending. The airline has reworked multiple outsourcing contracts and cut staff as a way to reduce spending in response.
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