¡Ay, Caramba! The coronavirus has grounded Grupo Aeroméxico SAB de CV, but their heavy debt load preceding the pandemic made the Mexican airliner a bankruptcy risk for many years prior.
“Our industry faces unprecedented challenges derived from a significant reduction in passenger demand on a global level,” the company said in a filing with the Mexican stock exchange.
While air travel is currently floundering, the company was overleveraged heading into the decline. Grupo Aeroméxico reported net long-term debt including loans and leases of around $2.7 billion at the end of March. It sold $400 million in five-year notes in January. Our FRISK® score saw Grupo Aeroméxico vacillate between a "2" and a "1" since spring of 2019, indicating an elongated period of severe financial distress:
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