Aeromar, a Mexican regional airline, has announced the cessation of its operations in a statement released on social media. The company cited “a series of financial problems” and “difficulty in closing viable agreements for its long-term operation” as the reasons behind the decision to discontinue its services.

Earlier on February 15, Mexico City International Airport (AICM) concessionaire had stated that it would not allow the airline to operate there unless it paid the more than 500 million pesos (about 26.7 million dollars) it owed, in line with the decision of Airports and Auxiliary Services (ASA), which had set the same date as the deadline for the debt that Aeromar owes for the supply of fuel.

With the decision, nearly 700 employees will be left without jobs. The company indicated that, except for some concepts related to the salary, Aeromar employees had received their base salaries normally.

Passengers affected by the abrupt cessation of operations will receive information “once alternatives are available in agreement with the competent authorities.”

Financial Struggles

The debts that Aeromar owes to social security services and savings funds of its workers affiliated with ASPA, to AICM, to ASA, and to the lessors of its airplanes have finally led to its downfall.

Although the company continued to provide commercial services until this week, its schedule had significantly decreased due to economic difficulties and the lesser number of available aircraft. The financial situation was critical, and its debts are theoretically unpayable without the intervention of an external investor.

The hope is placed on Nella, an American company presided over by a Brazilian entrepreneur, which is trying to acquire Aeromar. It is unknown what the holding company’s action will be in response to the operational cessation, but until last week, it was expected that the company’s representatives would hold a meeting with the government to propose a debt restructuring plan for the airline.

This article was originally published by Pablo Diaz on Aviacionline in syndication with AirlineGeeks.

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