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UPDATE 2-Aeromexico posts slimmer quarterly loss, eyes pickup amid pandemic

(Adds number of passengers in third quarter; workforce reduction)

MEXICO CITY, Oct 20 (Reuters) - Mexican airline Aeromexico on Tuesday posted a net loss of $130.38 million in the third quarter under the strain of the coronavirus pandemic, yet said passenger demand had begun to revive.

The drag on profits was considerably narrower than in the prior quarter, when Aeromexico posted a net loss of $1.19 billion.

“In spite of the complicated environment, the market has shown signs of recovery,” Aeromexico said in a statement, noting that its passenger capacity increased 68% since the second quarter, with more than a million people taking flights, especially domestic routes.

The company also reduced its workforce by 96 people, after cutting nearly 2,000 positions in the prior quarter.

Aeromexico in June began a Chapter 11 restructuring process, becoming the third airline to file for bankruptcy protection in Latin America, and has since received approval for up to $1 billion in financing.

Total revenue in the July to September period fell to 4.67 billion pesos ($211.3 million) from 18.35 billion pesos a year earlier, said Aeromexico, which is part-owned by Delta Air Lines .

Its net loss in the quarter amounted to 2.88 billion pesos, compared with a net profit of 65.8 billion pesos a year ago.

$1 = 22.1050 pesos at end-September Reporting by Daina Beth Solomon; Editing by Frank Jack Daniel and Stephen Coates

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