Aeromexico exits Chapter 11 bankruptcy protection
March 18, 2022
The parent company of Aeromexico on 17 March announced that it has fulfilled its court-mandated requirements and has exited Chapter 11 bankruptcy protection, marking the end of a two-year process as the flag carrier invests in the expansion of its fleet. Aeromexico entered Chapter 11 protection in June 2020 through the bankruptcy court of the Southern District of New York. The airline in January gained approval from both its creditors and the US court for its plan of reorganisation, which values the company at $2.56 billion. Stakeholders in the airline group are funding $763 million in new exit debt as part of the $1.5 billion being raised by the company, Aeromexico chief executive Andres Conesa states. Aeromexico plans to invest $5 billion “over the next five years in fleet and customer experience improvements” to rebuild and expand the airline, he says. Grupo Aeromexico has 128 operating aircraft, including 42 Embraer E190 jets at its regional subsidiary Aeromexico Connect, along with 69 Boeing 737-family aircraft and 17 787s at its mainline carrier. It aims to grow this fleet to a total of 147 jets by the end of 2022. Aeromexico capacity during March is scheduled to be 16% below that month in 2019 as travel demand recovers. Mexico throughout the Covid-19 pandemic has been the top international destination of American travellers, according to data from Airlines Reporting Corporation, analysed by trade group Airlines for America (A4A). For the near future, however, Mexican carriers including Aeromexico will not be able to launch new routes, increase frequencies or to register new aircraft to fly in US airspace. The US Federal Aviation Administration in May 2021 determined that Mexico does not comply with international safety standards set by ICAO and downgraded carriers in that nation to a Category 2 air safety rating. That decision does not impact existing routes and aircraft already registered for US flights. The pandemic continues and challenges remain, yet Conesa says: “Today is an incredibly exciting day for Aeromexico and we are ready to soar to new heights”.
Comair suspension lifted, kulula.com and BA flights can resume
March 17, 2022
British Airways (operated by Comair) and kulula.com flights will start operating again on Thursday morning, 17 March 2022, following the South African Civil Aviation Authority (SACAA) reinstating the company's Air Operators' Certificate (AOC). "We're pleased that the situation is finally resolved, following an immense effort over five days and nights to engage and work with the SACAA. After a thorough review of Comair's documentation, the SACAA has lifted the precautionary suspension of Comair's licence. "Our focus is now to get our operations back to normal as quickly as possible so we can further assist our customers," Comair CEO Glenn Orsmond said in a statement issued late on Wednesday evening. The British Airways and kulula.com schedules will be restored in a phased manner, and customers are advised to check the schedules on the airlines' websites before going to the airport.
American brushes off fuel costs amid ‘really strong’ demand
March 17, 2022
American Airlines expects an ongoing improvement in revenue to “more than” offset increases in fuel costs and other expenses in the first quarter of 2022. The US carrier now estimates that total revenue in the first quarter will be down 17% versus the same period of pre-pandemic 2019, an improvement on earlier guidance of a 20-22% decline. The reduction in first-quarter capacity relative to its 2019 level has widened to down 10-12% from the previous estimate of down 8-10%, American states in a 15 March US Securities and Exchange Commission filing. The US major, citing “winter weather events”, expects that total cost per available seat-mile (CASM) excluding fuel and net special items will be up 11-13% in the first quarter compared with 2019, versus the prior guidance of up 8-10%. American notes that the price of crude oil has risen “significantly”, driving an increase in the price of jet fuel. “The reaction to higher oil prices is modestly less capacity and higher ticket prices,” said American’s outgoing chief executive Doug Parker during the JP Morgan Industrials Conference in New York on 15 March. “We can make money with fuel at $100 a barrel and more. It takes a while to react.” Echoing statements made by Delta Air Lines executives at the JP Morgan event, Parker said American had during the previous week twice broken company records for daily ticket sales. “There’s really strong demand right now,” says Parker, who is retiring as chief executive on 31 March. “Business travel’s coming back as people are returning to offices, and it’s coming back rapidly.” American expects to end the first quarter with total available liquidity of at least $15 billion.