Aeromexico looks set to emerge from bankruptcy within days, but analysts believe the Mexican airline faces stiff challenges taking on low-cost competitors like Volaris, now the country's busiest airline. Aeromexico, which filed for bankruptcy in June 2020 as demand cratered in the first months of the pandemic, on Friday won final court approval for a restructuring plan that aims to reduce its debt from $2b to more than $1b. But even after slashing its debt load and operating costs under Chapter 11 protection, Aeromexico may struggle to claw back ground lost to low-cost carriers like Volaris, which has surpassed it as Mexico's biggest airline by passenger traffic. The convalescent airline could have "gone even further to reduce costs", said Rene Armas Maes, Commercial Vice President and Aeronautical Consultant at Jet Link International. Aeromexico succeeded in lowering the number of employees per plane to 109 in the first months of 2021 from 133 in 2019, but still had about 14 extra full-time employees per aircraft compared to its peers by the end of last year, he said. The employee-to-aircraft ratio includes all employees from pilots to administrative personnel on the ground. Aeromexico, which operates more than 120 aircraft, is overstaffed by 1,600 employees, according to Armas' international airline benchmark.<br/>
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Kenya Airways has selected financial advisers at Seabury Securities to help the airline evaluate options to restructure its debt load, according to people with knowledge of the matter. The airline, in which the Kenyan government has a 48.9% stake, faces mounting debts and depressed passenger demand amid pandemic-related travel restrictions. A representative for Kenya Airways said the carrier is in talks with several consultants, including Seabury, but declined to elaborate further. A representative for Seabury Securities declined to comment. Kenya’s Treasury confirmed plans to hire a consultant by end of January to help with the airline’s restructuring. Kenya Airways has been banking on the government to take control and absorb its debt, which totaled 92.5b shillings ($847m) at the end of 2020-- as the pandemic exacerbated years of losses. But after rounds of talks, Kenya’s government scrapped a plan to fully nationalize the carrier. Restructuring the airline would cost an estimated $1b and and the Kenyan government would have to inject money into the air carrier because the East African nation’s Treasury has already guaranteed $750m of the company’s debt, according to the IMF. The government has set aside 26.6b shillings to help Kenya Airways and other state-owned enterprises in a supplementary budget for the year through June, local newspaper Business Daily reported on Wednesday. KQ, as the airline is known, needs to overhaul its business model to minimize the burden it places on the state given the aviation industry’s challenges amid the pandemic, the IMF said. Changes required include cutting back on its operations and staff, enhancing efficiency and renegotiating leases and suppliers’ contracts, it said. While Kenya Airways expects capacity to return to 65% of pre-virus levels this year, it isn’t rushing to add back routes, Chief Executive Officer Allan Kilavuka told Bloomberg in an interview in November. The airline suspended seven routes in 2020 in a bid to preserve cash.<br/>