Mexican airline Aeromexico has requested permission from U.S. bankruptcy court to dismiss 1,830 employees in a cost-saving measure to weather the economic shocks of the coronavirus crisis, according to court filings filed yesterday, Reuters reported. The proposed layoffs, of 855 unionized workers and another 975 who do not belong to a union, would save the company $44 million on a recurring annual basis, Aeromexico said. Although the cuts will first cost the company $31 million in severance benefits, Aeromexico said the expected outcome “significantly outweighs the program’s one-time cost.” Aeromexico sought approval from the court to carry out the layoffs by the end of the month, according to the court filings. The company did not specify which positions would be eliminated. Aeromexico in June began a chapter 11 restructuring process in the U.S., becoming the third Latin American airline to file for bankruptcy protection, and has since received approval for up to $1 billion in financing. Read more.
With the COVID-19 pandemic grinding international travel to a halt, experts on an online panel at ABI’s International Insolvency Forum set for Nov. 18-20 will provide their insights into distressed non-U.S. airlines filing for chapter 11 protection, and how their cases may differ from domestic carriers. Click here to register.
