A year without Interjet: how the Mexican aviation market has changed

Exactly a year ago, Mexican carrier Interjet ceased operations. On December 11, Interjet’s Sukhoi fleet ceased flying altogether, leaving a significant void in the domestic and international market, a void that was filled by Viva Aerobus, Volaris and Aeromexico.

The disappearance of Interjet

Going into 2020, Interjet was a debt-ridden airline, having lost more than US$200 million in the previous two years. Nonetheless, Interjet had big plans, including increasing its commercial operations in the United States and launching routes to Honduras and Colombia.

In 2019, Interjet carried more than 15 million passengers and was third overall behind Volaris and Aeromexico. Internationally, it was only behind Aeromexico in terms of travellers.

The hybrid carrier (it wasn’t low-cost or legacy, and that was a downside) had a fleet of 88 planes. It operated with 66 Airbus A320 and 22 Sukhoi Superjet 100 aircraft.

Interjet served more than 80 destinations, equally divided between Mexico and abroad. While all seemed well on the surface, underneath Interjet was in serious debt. The airline has recorded annual net losses almost every year since 2013.

There is a lot to be said to explain Interjet’s financial arrears. I think the two main factors that contributed to his demise from the airline were the acquisition of the Sukhoi fleet and the operation of a hybrid model unable to compete with Volaris and Viva Aerobus in the low-cost segment or with Aeromexico in the inherited one.

When the COVID-19 pandemic hit the Latin American region, Interjet’s problems escalated. Leasing companies have begun to repossess the Airbus fleet from Interjet. Suddenly the airline lost the planes it needed to fly (because the Sukhoi were grounded).

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The last months

Interjet had no choice but to reactivate the Sukhoi fleet and continue flying on a minimal roadmap. Prior to this, Interjet planned to sell the Sukhoi aircraft and use a one-design fleet with the Airbus A320. The decision was made too late.

But, in November, the airline showed signs of bankruptcy. It initially stopped flying for two days, citing operational issues. Then the airline repeated the grounding until December 11, and Interjet never flew again.

In January, Interjet employees launched a strike against the company, after months of unpaid wages and benefits. The airline owes about $1.25 billion in debt. Interpol has issued an international arrest warrant for Miguel Alemán, the airline’s co-founder. One of the airline’s owners, Alejandro del Valle, was arrested in September for fraud and released a few months later.

Loss of Interjet to Volaris, Viva Aerobus and Aeromexico

The market share left by Interjet was quickly taken by the low-cost carriers Volaris and Viva Aerobus. Aeromexico also reaped the benefits of having one less competitor but at a slower pace.

In 2021, Volaris and Viva Aerobus increased their market shares. Viva Aerobus increased its market presence from 20% to 28% and Volaris from 31% to 40%. Both carriers are already showing higher traffic than in 2019.

Last month, Aeromexico recorded an increase in the number of domestic passengers carried for the first time in the pandemic.

In the meantime, the management of Interjet is threatened with bankruptcy under Mexican law. They also appointed a new CEO with plans to launch an Interjet 2.0 with a fleet of Airbus and Let L-410 Turbolets.

It seems unlikely that Interjet will fly again. Its debt is too great, the bankruptcy process can take forever (look at the Mexicana story) and the brand’s reputation may be beyond repair. Interjet was an airline that flew to Mexico between 2005 and 2020.

Have you ever flown with Interjet? How was your experience? Let us know in the comments below.