Mexican Gathers Lawsuits and Financial Obligations from Vendors
Let's talk about the ongoing struggles of Mexicana de Aviación, the Mexican state-owned airline. This airline has been running for a year and a half, but it's still struggling to make a name for itself in the regional aviation industry and continues to accumulate debt.
The most significant financial burden comes from the purchase of 20 Embraer 190-E aircraft from Brazil, which set the government back 20,871 million pesos. Furthermore, the federal government has a pending second payment to former employees of the bankrupt 2014 Mexicana de Aviación, in exchange for immovable property.
In 2023, a first payment of 407.5 million pesos was made for the transfer of intellectual property and industrial property rights of Mexicana. However, a pending payment of 408 million pesos for a pair of buildings, a training center, and a flight simulator is still due.
The government might also have to pay 188 million pesos if Mexicana loses a lawsuit in New York filed by SAT Aero Holdings for 9.9 million dollars. The trial is ongoing due to the cancellation of a contract involving the supply of aircraft and crews. SAT Aero Holdings was supposed to deliver 10 aircraft to Mexicana through a lessor, but didn't receive the payments.
In Mexico, Mexicana is also facing two labor lawsuits for 1,896,610 pesos. Also, passengers who were left stranded after Mexicana's significant losses have filed a lawsuit with the Federal Consumer Protection Agency for their refund, amounting to an estimated 50,481 pesos.
Amidst this financial turmoil, Mexicana reported losses of 120 million pesos between January and March of this year. Despite a 50% year-over-year passenger growth in the first quarter of 2025, the airline only managed to generate around 91.2 million pesos in revenue, with expenses amounting to a staggering 271.5 million pesos, mainly due to payroll.
In a nutshell, Mexicana de Aviación is in a vulnerable financial position, dealing with operational challenges, heavy reliance on government subsidies, poor market share, and ongoing financial strains. It's important to note that Mexicana's inability to resolve its financial obligations could potentially result in negative consequences, both politically and financially [1][2][3][4].
The ongoing financial struggles of Mexicana de Aviación have not only involved operational challenges, but also significant investments in the aviation industry, such as the acquisition of Embraer 190-E aircraft and payment of intellectual property rights. The airline's business is also burdened by debts, including a second payment to former employees, unpaid amounts for buildings, and potential legal fees from lawsuits in Mexico and New York.
