MIAMI – Mexico’s largest airline Aeromexico (AM) has been given US$50m in aid by investment holding company Aimia Inc.

This comes as the carrier analyses a restructuring of its financial commitments in the wake of the COVID-19 pandemic that has severely affected the industry.

Earlier this month rumors circulated that AM was considering filing for Chapter 11 bankruptcy protection in the United States, which caused the airline’s stock to tank. Aeromexico has since clarified that this is not the case.

Additional Funding Secured

PLM Premier, the operator of Aeromexico’s Club Premier loyalty program, gave an another US$50m to the airline by way of an existing inter-company loan facility once a letter of intent was signed between AM and Aimia

Statements by both parties claimed that they had reached an agreement to amend shareholder terms between the two, as well as reaching an additional commercial agreement between the airline and PLM.

“An additional US$50m advance to Aeromexico by PLM through pre-purchases of award tickets was provided with the execution of the amendments to the commercial agreement. This financial support totals $100 million and is secured by Aeromexico’s stake in PLM,” the firms said regarding the deals.

Moving Forward

Aimia and AM said that they would find ways to get additional resources to shareholders by taking advantage of PLM’s cash flow and debt-free balance sheet.

Aimia’s Chief Executive Phil Mittleman said that they “are very pleased to be in a position to utilize the robust cash flow and financial attributes of PLM to support our airline partner during this challenging time.”

Additionally, AM was given the opportunity to purchase a 48.9% equity stake in PLM, currently held by Aimia, over the next seven years.

Back in April, AM sought a state liquidity support line to no avail. While not all governments have denied aid to airlines, the latest case being the Lufthansa (LH) bailout, this private injection of capital bids well for the Mexican airline.