Aeroméxico (AM, México City International) parent Grupo Aeroméxico has announced plans to list on the New York Stock Exchange (NYSE) to raise up to USD300 million in the initial public offering (IPO), according to a US Securities and Exchange Commission (SEC) filing on May 13 and a report by investment bank Renaissance Capital.

The company, which delisted its shares from the Mexican Stock Exchange (Bolsa Mexicana de Valores - BMV) in December 2022 while under Chapter 11 bankruptcy protection, said it had applied for the registration of its shares at the Mexican financial regulator (Comisión Nacional Bancaria y de Valores - CNBV) but that no public offering will be made in Mexico. Grupo Aeroméxico will change to a variable capital company, or S.A.B de C.V.

In the IPO its shareholders will sell American Depositary Shares (ADSs), but the company did not reveal a price range for the offering.

In March 2023, Aeroméxico’s chief executive, Andrés Conesa, said that listing in New York “gives you access to financing that’s fundamental for a company, particularly an airline [...]. It’s best to have as many lines of financing as possible.”

Currently, AP Aguila Holdings Ltd (in which Apollo Management has a 89% stake and Banco Actinver Trust 11%) owns 22.4% of Grupo Aeroméxico, Delta Air Lines (DL, Atlanta Hartsfield Jackson) owns 20%, and the remaining 57.6% is owned by other individuals and entities including directors Eduardo Tricio Haro, Valentín Diez Morodo, Antonio Cosío Pando, and Jorge Esteves Recolóns.

Upgauging strategy

Also in the SEC filing, Grupo Aeroméxico said it planned to expand capacity through “upgauging” its fleet, a strategy that presents “less risk than expanding our fleet by adding new aircraft.” This will be done via Aeroméxico’s B737-9s, which are replacing the carrier’s E190s. The MAX 9s have 181 seats (16 in first class, 18 in premier economy, 147 in economy), versus 99 on the Embraer aircraft (11 in first class, 88 in economy).

“As demand continues to rebound and surpass pre-pandemic levels, we intend to further utilise our highly efficient Boeing 737 MAX aircraft in place of the E190 aircraft, which will upgauge our fleet and further reduce our CASK,” it said.

In December 2021, Aeroméxico operated forty-seven E190s but had reduced these to thirty-seven by March 2024. In 2021 and 2022, it added forty B737 MAX to its fleet, and in 2023 it added five more (it currently operates thirty-four B737-8s and nineteen B737-9s, according to the ch-aviation fleets module). It has nine MAX 9s scheduled for delivery during 2024, one of which arrived during the first quarter.

In all types, Aeroméxico said it expects to add up to 32 new aircraft between 2023 and 2025, of which 27 are MAX and five B787s. It has not disclosed whether it expects quality issues at Boeing to affect deliveries.

The airline declined to discuss its strategy further to what it has announced.