Aeroméxico is about to close the episode of a restructuring that has lasted for more than a year and a half, and is entering a new stage in which it seeks to recover pre-pandemic passengers and revenue, and even grow eventually. However, meeting the goals set for this year is difficult as the airline industry finds itself immersed in a highly challenging macroeconomic environment.
2021 was the first year in which the airline’s forecasts were put to the test, and in general it can be said that they were correct. For this period, the company expected to capture revenues of 2,141 million dollars (mdd) in the disclosure statement (or disclosure statement ) of its restructuring plan, while in the financial statements of the last quarter of the year it reported 2,221 million dollars, 4% more than anticipated.
Similarly, estimates pointed to a traffic of 16.8 million passengers, which in the report for the fourth quarter of 2021 was 16.55 million passengers, just 1% below expectations.
For Marco Montañez, director of variable income analysis at Vector Casa de Bolsa, a high demand for flights at different times of the year boosted the airline’s results, which even helped it not suffer the effects of the new variants of Covid- 19 on the market.
“I believe that the vaccination programs had a greater than expected positive effect in increasing confidence in the demand for air travel, as well as the increase in average fares due to last-minute demand, particularly towards the end of the year,” explains the specialist. “This more than offset the disruptions to the operation caused by the surge in the omicron variant towards the end of last year.”
In this regard, Brian Rodríguez, an analyst at Monex Grupo Financiero, reports that Aeroméxico’s recovery is even faster than expected at the start of the pandemic, mainly due to accumulated market demand and Interjet’s exit from operations.
However, the persistent inflationary environment due to the crisis in global supply chains, coupled with a rise in fuel prices due to Russia’s invasion of Ukraine, put on the table a challenging scenario to meet the objectives of growth of the airline, which this year seeks to generate operating income of 3,329 million dollars (which would mean an increase of 50% compared to what was achieved in 2021) and a flow of 25.8 million passengers (56% more than last year).
“Operating, we see a very challenging year for the airline sector in general,” explains Rodríguez. “January and February were challenging by omicron; Although the markets have focused more on inflation and geopolitical conflicts, for aviation it is still important. It has an international impact, because in the face of more cases of contagion there are impediments to operating normally.”
For analysts, high inflation could affect people’s purchasing power, which would affect demand, to which is added the rise in fuel, which could raise the airline’s operating costs and even be transferred to the consumer, translating into higher rates.
“In 2021, fuel expenses represented 26% of the company’s total expenses (excluding restructuring [costs]). Historically, they have represented on average between 30% and 33% of total expenses. If oil prices remain at high levels for a long time, the impact on profitability will be very negative”, considers Montañez.
For now, Aeroméxico continues to move towards its exit from Chapter 11 of the US Bankruptcy Code. At the moment, it is waiting for the conclusion of the public offer for the acquisition of shares (OPA) for next March 15, which will give rise to the entry of new capital to the airline and other actions to execute its restructuring plan.
