Mexican carrier Aeromexico has recovered 79% of its total pre-pandemic revenue, the airline said in first-quarter financial results. Aeromexico’s revenues totaled 12.9 billion pesos (about $630 million) between January and March.
The Mexican carrier, headquartered in Mexico City Benito Juárez International (MEX), carried 4.1 million passengers, still 18% below 2019 levels, impacted by the COVID-19 pandemic, lower demand international market and the rise of low-cost airlines in the domestic market.
During the quarter, Aeromexico’s revenue reached 12.9 billion pesos and EBITDAR was 2.9 billion pesos ($142 million). Nevertheless, the carrier’s operating profit reached a negative result of 763.4 million pesos and a net loss of three billion pesos ($37 million and $146 million, respectively).
“The industry continues to recover, gradually approaching pre-pandemic levels. During the quarter, Aeromexico ASKs (Available Seat Kilometers) were 80% of the same period of 2019, mainly due to the full recovery of the domestic market and the sequential recovery of international markets.”
Aeromexico’s domestic capacity recovered to 99% of 2019 levels, and international ended the quarter at 72%.
Aeromexico lost $146 million in the quarter. Photo: Guillermo Quiroz Martínez via @gquimar.
However, Aeromexico’s first quarter was also impacted by Omicron, the latest variant of COVID-19, which caused cancellations and delays in early January and February. In January, a wave of COVID infections among Aeromexico staff wreaked havoc.
Fuel was another challenger for Aeromexico during the period. The average cost of fuel per liter in pesos increased by 66.6%, from an average of 9.70 pesos per liter in the first quarter of 2021 to an average of 16.17 pesos per liter this year.
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Inflation and the depreciation of the Mexican peso have also increased pressure on national airlines.
According to the airline, to offset higher fuel costs, Aeromexico implemented network adjustments and revenue initiatives. Additionally, Aeromexico grew its ancillary revenue by 38.2% year-over-year. Ancillary products are essential for airlines as they allow them to obtain higher revenues through the sale of seats, additional baggage, etc.
Aeromexico closed the quarter with cash worth 28 billion pesos (about $1.37 billion).
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Aeromexico’s domestic capacity has recovered to 99% of 2019 levels. Photo: Guillermo Quiroz Martínez via @gquimar.
The Aeromexico Fleet and Chapter 11
During the quarter, Aeromexico emerged from Chapter 11 proceedings after more than a year and a half.
As stated in the airline’s reorganization plan, the equity value of the reorganized Aeromexico is approximately US$2.564 billion. Aeromexico has capitalized and secured over $3.7 billion in unsecured loans, DIP financing and new capital injections.
The Mexican carrier has announced that it will invest US$5 billion over the next five years in its fleet and other items. In March, Aeromexico and Air Lease Corporation announced the lease of nine new Boeing 737 MAXs, including two new Boeing 737 MAX 8s and seven Boeing 737 MAX 9s.
These jetliners will be delivered between July 2022 and August 2023 from Air Lease Corporation’s backlog with Boeing.
During the first quarter of 2022, Aeromexico received ten Boeing 737 MAX. The average age of the airline’s fleet is 7.8 years.
As of March 31, Aeromexico’s fleet consisted of 18 Boeing 787 Dreamliners, one B737-700 (compared to five in the last quarter), 36 B737-800s, 27 B737 MAX 8s (compared to 21), ten B737 MAX 9s (compared to six ) and 42 Embraer E190 (compared to 47 in December). The airline’s operating fleet consists of 134 aircraft.
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