MIAMI – AeroMexico (AM) reduces international and domestic capacities by 35% and 50% correspondingly, grounding 40 aircraft and adjusting salaries to preserve cash and long term operation.
As a result of the worldwide travel restrictions and low passenger demand, AM is facing an unprecedented impact. One measure the airline is taking involves delaying all non-operationally critical capital expenditure and discretionary expenditure.
Currently, according to its statement, AM registers “a strong balance sheet thanks to all its stakeholders. All the resources that AeroMexico has obtained in the last few years have been reinvested in the company, this has allowed AeroMexico to acquire its own fleet and be up to date in all its financial obligations.”
Coming staff measures
Alongside the airline, it will possibly ground more aircraft in the following days, as Senior Managers agreed to pay cuts of 50% of their monthly salaries while other employees agreed to contribute according to their level.
Also, 80% of administrative personnel currently are working remotely until further notice while for staff who cannot fulfill functions from home due to their type of work, AM has implemented additional sanitary and safety protocols.
Furthermore, AM’s additional saving costs measures include the activation of the Voluntary Leave of Absence program for 30, 60, or 90 days along with negotiations with its main suppliers, including fleet lessors and airports.
Regarding these measures, “AeroMexico extends its gratitude to “the unions and all associates for their tremendous support and for taking important actions that would help protect jobs in the long term.”
For the safety of its employees and following COVID0-19 preventive measures, AM is implementing additional sanitation and disinfection measures in all its aircraft and workplaces, updating communications daily and working alongside authorities.
The carrier informs that on March 17, it was notified by the Moody’s Rating Agency that its corporate credit rating had been adjusted to B2. About its debt instruments, they have been adjusted to B3 in the form of Senior Unsecured Notes issued by its subsidiary Aerovias de Mexico.
On March 18, the company’s corporate credit rating was adjusted to B+ by S&P Global Ratings. “This in the context of the rapid and increasing spread of COVID19 and the deterioration in the world economic outlook,” added the airline.