A holding company that includes commercial aviation subsidiaries in Mexico and has filed for Chapter 11 bankruptcy in the United States is continuing its negotiations of new collective bargaining agreements with aviation flight attendants’ and pilots’ unions.
Grupo Aeromexico Sociedad Anonima de Capital Variable is continuing negotiations with the Trade Union Association of Aviation Flight Attendants (Asociación Sindical de Sobrecargos de Aviación de México – ASSA) and the Union Association of Aviators Pilots of Mexico (Asociación Sindical de Pilotos Aviadores de Mexico – ASPA) “during the seven day grace period established at the Credit Agreement (‘Cure Period’),” a press release reported.
“The company recognizes the effort that the unions have made to contain the negative effects of the pandemic and will continue to work in a coordinated manner with its representatives in order to meet the necessary conditions to request the next disbursement under Tranche 2 of the DIP (Debtor-in-Possession) Financing,” the press release said. “Aeromexico will continue pursuing, in an orderly manner, the voluntary process of its financial restructuring under the Chapter 11 process, while continuing to operate and offer services to its customers and contracting from its suppliers the goods and services required for operations.”
Grupo Aeromexico is accessing DIP financing, which helps it reorganize and keep operating through its Chapter 11 bankruptcy protection process, Investopedia said.
“This version of bankruptcy gives the debtor a fresh start. However, the terms are subject to the debtor’s fulfillment of its obligations under the plan of reorganization,” Investopedia said.
DIP financing facilitates the debtor-in-possession’s reorganization, allowing the company with DIP status “to raise capital to fund its operations as its bankruptcy case runs its course,” Investopedia said.
Grupo Aeromexico and “certain of its affiliates filed voluntary Chapter 11 petitions in the United States,” a press release said.
Aeromexico CEO Andres Conesa said in the press release that the corporation will use “the Chapter 11 process to strengthen our financial position, obtain new financing and increase our liquidity, and create a sustainable platform to succeed in an uncertain global economy.”
“Our industry faces unprecedented challenges due to significant declines in demand for air transportation globally,” Conesa said in the press release. “Hence we are committed to taking the necessary measures so that we can operate effectively in this new landscape and be well prepared for a successful future, during and when the COVID-19 pandemic is behind us.”
