The Latest by Region
- The situation at Mexico’s Interjet appears to be going from bad to very bad. Very, very bad. In July, the embattled carrier managed to sell a 90% stake to new investors, netting it a crucial $150m in new capital. Whew. It could avoid bankruptcy. Or maybe not. The investors haven’t yet provided the money, worried that it would immediately be claimed by the government seeking to recoup unpaid taxes.
In the meantime, funds are dwindling. Interjet was forced to cancel all of its flights during part of last week because it couldn’t afford to pay for the fuel. It also owes money to airports. It can’t pay workers on time. Even the government warned consumers to beware of booking flights on Interjet, mentioning that it might soon go bankrupt. It’s currently flying just a handful of Russian-built SSJ-100s, after having much of its leased Airbus fleet repossessed.
Interjet, for its part, denies that it will file for bankruptcy, confident it will secure the $150m investment once it works things out with tax officials. And ultimately, it could raise more money through a public offering of its shares. Mexico’s government, remember, like others throughout Latin America, hasn’t provided any meaningful airline industry aid (air travel is considered more of a luxury in the region, and thus politically difficult to support with taxpayer money).
If Interjet does disappear, Mexico’s airline industry would follow the template of Brazil, which became an effective triopoly after Avianca Brasil disappeared. Latam, Azul, and Gol immediately saw profits surge. This time, it’s Volaris, VivaAerobus, and Aeromexico poised to benefit.