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AeroMéxico - a US bank’s baby

3-Jul-2009
  • Swine flu and Global meltdown have been a lethal combination;
  • Merger speculation is dismissed – at least for now;
  • The already large fleet is set to grow next year.

From 2006, Consorcio AeroMéxico the parent company of AeroMéxico, faced large debts it was unable to pay off, eventually forcing the company to offer AeroMéxico for sale. In Oct-07, Mexico’s second largest bank, Banamex, purchased the airline in an auction for USD249.1 million. Banamex is a subsidiary of Citigroup, the major US bank.

Swine flu and the economic crisis a bad combination, but no merger for the present

As Mexico was the source of the outbreak of H1N1 Swine flu, its airlines have been particularly affected by declines in passenger numbers, and outright flight bans (since lifted) imposed by various countries.

AeroMéxico announced in late Jun-09 that it has no immediate plans to merge with rival Mexicana, despite wide speculation that a deal was planned as a way for the airline to survive the catastrophic decline in tourism caused by the economic crisis and the flu outbreak.

AeroMéxico's Chief Executive, Andres Conesa, said that teaming up with Mexicana was always a possibility, but there was nothing concrete for now. He said Mexicana was an option "as well as many others."

He added that the company was open to everything from a merger in Mexico or abroad, to buying a local competitor or selling some assets. The company's board is also thought to be considering accessing debt markets to boost finances, but Conesa declined to comment on this.

Despite current difficulties, AeroMéxico optimistically says it plans to carry 12 million passengers in 2009, about the same as 2008.

The airline would be hoping this will occur, as even though no new main fleet aircraft are scheduled to be delivered this year, 2010 has a raft of new B737NGs set to arrive with AeroMéxico Connect due to receive five new ERJ190s.


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