EconomyFinancialInterjet's restructuring: overdue and with a long way to...

Interjet's restructuring: overdue and with a long way to go

After six months without operating and more than five with its workers on strike, Interjet still seems far from the path that will take it back to the runway. With a process of commercial bankruptcy started at full speed, the loss of personnel and without cash in the stock market, the airline faces a restructuring that aims to extend for the rest of the year, while its competitors fill the gap it left in the market domestic.

The Interjet crisis was seen in 2019, when a series of debts and staff shortages led to waves of cancellations during April and summer. The pandemic took the company into a vulnerable situation, rapidly ceasing to operate practically its entire fleet – which went from 68 aircraft to five teams in a matter of months – and cutting salaries from April, which would eventually stop being paid from September. .

The indefinite suspension of operations of the airline, on December 11, 2020, was followed by an outbreak of strike on January 8, from which time there was talk of a commercial bankruptcy that, although it has already been approved by its shareholders, It has not formally started, and has had its greatest promoter in the union, who obtained a declaration of commercial bankruptcy in its favor on April 9.

Where is it standing?

Before the Section 15 union promoted the bankruptcy, Interjet had expressed its intention to reach an agreement with its creditors before restructuring, to reach an eventual lawsuit with closed deals with its suppliers for an amount calculated at approximately 1,000 millions of dollars.

“We want to talk with all suppliers to be able to arrive in a more orderly manner and give everyone certainty to this commercial contest,” Carlos del Valle del Río, Interjet’s media director , told Expansión last April.

At the time, the airline expected to return to operations with a fleet of 15 aircraft by July. However, the airline does not have assigned take-off and landing times – known as slots – at the Mexico City International Airport, and the sale of tickets through its digital distribution channels remains frozen, while the physical points of sale are still in the hands of Section 15.

For Roberto Montalvo, an academic at the Ibero-American University, the absence of Interjet is beginning to be reflected in higher prices and a less competitive environment in the absence of more supply, in addition to missing another high season, that of summer.

“They have not operated for too long and that works against them,” warns the specialist. “They would have to find important alliances to balance themselves financially, and there is also the issue of personnel and their pending commitments. If there is an eventual return, they have no manpower ”, he explains.

Although other airlines in the region have initiated restructuring processes – Aeromexico through US Chapter 11, in addition to Avianca and LATAM under the same scheme – Interjet has been the only one that maintains the intention of readjusting itself without operations involved, as it did. your competitors have done.

Whats Next?

According to the file of the commercial bankruptcy promoted by the union, next Monday an Interjet representative must appear before the Sixth District Court for Civil Matters in Mexico City to become aware of the commercial bankruptcy.

Subsequently, the airline will have nine days to give an answer, and then the commercial bankruptcy judge will have five to admit the bankruptcy, after which it will formally begin.

Once the commercial bankruptcy has been declared, the airline will have six months to reach an agreement with its suppliers, of which around 93% are in Mexico and 7% in the United States, as previously mentioned by the airline.

Interjet has set a new date for the restart of operations for 2022, as expressed to the A21 site in previous weeks. However, as time passes, a return becomes more difficult, especially in the same conditions as before the pandemic.

“It is very difficult, the chances that they can fly are lower. If you do not see a clear settlement in the commercial matter that they bring, I do not think it will be that simple “, considers Montalvo. “If he comes back it will be with the basics, he will have very little, and with that he will have to plan to generate [cash] flows.”

Expansión contacted the Interjet communication area, but until the publication of this text, no response had been obtained.

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