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Aeromexico aims to lift operations nearly 20% in August

Stock MarketsJul 29, 2020 11:00PM ET
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MEXICO CITY (Reuters) - Airline Aeromexico (MX:AEROMEX) said on Wednesday it plans to increase operations by almost 20% in August from July as the Mexican company moves ahead with bankruptcy proceedings that began late last month in the United States.

In a statement, the company said August would be the third month in a row in which it would ramp up operations.

Aeromexico shares rose after the announcement, closing the day 5.04% above the prior session at 5 pesos a share, despite the carrier posting a second-quarter loss of nearly $1.2 billion after the market closed on Tuesday.

Later on Wednesday, the company said in a filing to the Mexican stock exchange that a New York bankruptcy court had given the airline permission to keep paying salaries, loans and its tax obligations. The court also gave the green light to "keep existing contracts with key suppliers, travel agencies, partner airlines and insurance companies."

The court authorized Aeromexico to meet obligations in certain "customer programs," including for co-branded American Express (NYSE:AXP) cards and Chubb (NYSE:CB) Seguros Mexico insurance, and to continue with existing derivative contracts.

The Mexican airline can "fulfill and honor" obligations to customers as it sees fit, according to the court, as well as continue to use third-party services for customers.

The bankruptcy court in New York's Southern District also ruled that the company could maintain and renew its letter of credit and surety bond programs without interruption.

Aeromexico, part-owned by Delta Air Lines (N:DAL), late last month became the third airline in Latin America to file for bankruptcy protection, where carriers hit by the coronavirus have had limited help from governments.

Aeromexico aims to lift operations nearly 20% in August
 

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