Mexican airlines could go bankrupt due to coronavirus, experts say

[Inkriql]

Mexican airlines have flown for many years without presenting problems that put their economy at risk or even the severe possibility of bankruptcy; however, coronavirus disease will put some of them at risk.

According to experts, Interjet, Aeroméxico and Volaris will present considerable problems due to the reduction of flights due to the closure of borders in various countries.

Rogelio Rodríguez, an expert in aeronautical issues, stressed for the newspaper Reforma that some airlines will be immersed in such a serious financial crisis that they will be forced to apply for a bankruptcy if the government does not implement fiscal support.

The commercial bankruptcy is a procedure that is executed before a judge, so that an agreement can be reached with the creditors, to modify the debt conditions and to be able to settle in a better way.

The Mexican airline Interjet is one of the companies that could be affected, since until the end of 2019 it had a debt of 549.2 million pesos for VAT before the SAT.

In the case of Aeroméxico and Volaris, the ugly panorama will be focused on their international routes, since the fact of lowering passenger demand impacts their economy.

While VivaAerobus could be the least affected by having national flights and belonging to Grupo IAMSA, whose main division is buses.

Juan Antonio José, an aviation consultant, stressed that those airlines that do not have financial strength will face a higher risk of bankruptcy.

Meanwhile, Alejandro Cobián and Edmundo Olivares, partners of the firm Flores, Olivares, Cobián Abogados & Consultores, reiterated for the same newspaper that all the airlines will suffer from less liquidity and their financial commitments will not cease.
Volaris will also be affected by its international routes. (Photo: Reuters)
Volaris will also be affected by its international routes. (Photo: Reuters)

Since the beginning of March, countries such as the United States, Canada, as well as some from Europe and Latin America announced the closure of borders, so the flights were canceled, due to the spread of COVID-19 that affects 186 countries and has left more of 18,700 dead worldwide.

The airlines had to make the decision to lower routes, capacity and even reduce the participation of workers.

"Volaris will take various actions to reduce costs and maintain liquidity during this period of reduced demand and the resulting adjustments in capacity on our route network," the company announced a few days ago about the 50% reduction in its operations.

Even from the first days of this month, Aeroméxico was one of the first to announce that it would lower its flights to Europe by 40%, a continent where the most affected country (Italy), has a record to date of 6,820 dead and 69,176 infected .