Aeromexico exits bankruptcy with plan to invest $5 billion in fleet

Grupo Aeromexico SAB has emerged from its restructuring process and will invest $5 billion over the next five years to expand its fleet as it prepares to start growing again.

The carrier won court approval to emerge from Chapter 11 in late January but still had to fulfill certain conditions to finalize the process, Aeromexico said in a statement Thursday.

The company is looking to “significantly” increase its network and fleet, which will grow to 147 jets from the current 124 by the end of the year. The $5 billion investment in the next five years will focus mostly on additional fleet growth, but also on meeting its environmental, social and governance, or ESG, goals. The reorganized company is valued at $2.56 billion.

Mexico’s second-largest airline filed for bankruptcy in the U.S. in 2020 as the pandemic caused a severe downturn in travel. Aeromexico saw the number of passengers it carried plummet more than 90% as governments grounded flights and travelers stayed home. The carrier, unlike its counterparts in the U.S. and Europe, received little to no support from the government.

“We look forward to starting a new chapter in our company’s history, backed by a sound financial base, solid capital structure, and investors who have full confidence in our future,” said Chief Executive Officer Andres Conesa in the statement.

The company will raise approximately $1.5 billion in new capital, including issuing $763 million in U.S. notes, according to the statement. Apollo Global Management, which led the $1 billion debtor-in-possession financing, will retain a 22.4% stake while Delta Air Lines Inc. will have 20%. A group of Mexican investors will hold a 4.1% stake, while the remaining shares will be distributed among new investors and creditors.

Conesa, Chief Financial Officer Ricardo Sanchez Baker and Chairman Javier Arrigunaga will remain in their current roles.