Interjet (Toluca) has been declared bankrupt, with a judge agreeing to give the carrier 185 days to reach agreement with creditors, a development welcomed by the company’s management.

Saúl Martínez Lira, a judge at the District Courts for Commercial Bankruptcy Matters in Mexico City, on August 30 declared the airline’s legal entity ABC Aerolíneas to be in commercial bankruptcy and suspended Interjet’s payments, following a request made by Aguilar Amilpa Abogados, a local law firm acting on behalf of a group of creditors.

The ruling comes about 18 months after the low-cost carrier suspended flight operations, a move that itself came just one month after it gained a new owner, Alejandro del Valle, who acquired a 90% stake and took up the positions of president and chairman of the board.

His son Carlos del Valle, Interjet’s deputy director, praised the judge’s decision to allow the company to enter commercial bankruptcy, as it “will help protect the company financially,” protect and preserve its assets, and structure its liabilities. He declared in a video message posted on Twitter: “It is a great day for the entire Interjet family. Once our mediator is assigned, we’re going to ask for authorisation to make essential payments.”

Mexico’s Secretariat of Infrastructure, Communications and Transportation now has five days to assign a mediator to the case, court papers show. The judge invited creditors of the airline to present to the bankruptcy conciliator their applications for recognition of credit.

It was reported in September 2021 that Interjet had a total debt pile of MXN56.1 billion pesos (USD2.8 billion), a large chunk of which is owed to the Mexican tax authority (Servicio de Administración Tributaria - SAT) and other government agencies. Later that year a new chief executive, Luis Federico Bertrand Rubio, said it was seeking to renegotiate debts of MXN40 billion (USD2 billion) with various creditors so it could resume flight operations by spring 2022.

Interjet’s union has been on strike since flights were suspended in January 2021, claiming employees had not been paid for months of work, while aggrieved passengers have launched a collective complaint at Mexico’s consumer prosecutor’s office (Procuraduría Federal del Consumidor - Profeco) to demand refunds for flight cancellations.

“Soon we will announce the steps to follow for all those people left with the issue of tickets and vouchers and all of the customers who had any inconvenience,” del Valle pledged in his message.