MEXICO CITY (Reuters) - Shares in Aeromexico were down 5.4% on Friday after a newspaper column said the Mexican airline was preparing to file for Chapter 11 bankruptcy protection in the United States due to the fallout from the coronavirus pandemic.
The future of many airlines has been placed in doubt by the curbs on travel imposed by governments across the globe, with well-known Latin American airlines Avianca <AVT_p.CN and LATAM (LTM.SN) already initiating bankruptcy procedures.
Like other airlines, Aeromexico <AEROMEX.MX,> is battling a sharp drop in demand, with passenger numbers down 92.4% in May from the same month last year.
Aeromexico shares were trading at 6.6 pesos at 12:58 p.m. local time (1:58 p.m. eastern time) on Friday.
Reuters was not able to independently verify the claims made by the column, in the El Financiero newspaper. Aeromexico did not immediately respond to a request for comment.
While some airlines have been given bailouts by their governments, Mexico’s leftist president, Andres Manuel Lopez Obrador, has been adamant that he would not use taxpayer money to bail out shareholders in large companies.
The column said Aeromexico had appointed financial advisers to help with bankruptcy proceedings, and was “following exactly the same steps” taken by Avianca and LATAM.
“The process to restructure debts is underway,” said the column’s author, Dario Celis, without citing sources.
Writing by Drazen Jorgic; Additional reporting by Noe Torres; Editing by Frank Jack Daniel and Steve Orlofsky