FILE PHOTO: The logo of the aerial company Aeromexico is seen at the Aeromexico counter at Benito Juarez international airport in Mexico City, Mexico, July 1, 2020. REUTERS/Edgard Garrido
July 2, 2020
MEXICO CITY (Reuters) – Shares in Aeromexico rose by up to 26% on Thursday after nosediving a day earlier in response to the Mexican airline’s announcement it had started bankruptcy proceedings as the coronavirus pandemic battered business.
Aeromexico <AEROMEX.MX>, part-owned by Delta Air Lines, said on Wednesday it will offer fewer flights and have fewer planes as it begins Chapter 11 restructuring.
The company is the third airline to file for bankruptcy protection in Latin America, where carriers hit by the coronavirus have had less help from governments.
So far neither the government, nor the airline, has given any indication it could receive any sort of state aid.
Mexican President Andres Manuel Lopez Obrador has repeatedly said he will not bail out big business during the pandemic, arguing that in past crises, government rescue packages meant the poor were left to foot the bill for the wealthiest.
The company’s shares plunged as much as 65.7% to record lows on Wednesday before trimming some of those losses later in the day. The recovery continued on Thursday, taking the shares as high as 5.29 pesos at one point, or a jump of 26.9%.
Rating agency Standard & Poor’s cut Aeromexico’s credit ratings to D from B- on Wednesday and forecast the airline would only be flying at half-capacity by the end of 2020.
(This story corrects typo in headline)
(Reporting by Noe Torres; Editing by Anthony Esposito and Alistair Bell)
