Analysis: Aeromexico may still hit bumps after bankruptcy exit

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/>