Mexico’s economy last year suffered its biggest annual contraction since the 1930s, although it recovered better than expected from the ravages of the COVID-19 pandemic during the final quarter, preliminary data showed on Friday, Reuters reported. Gross domestic product in Latin America’s second-biggest economy tumbled by 8.5% last year in seasonally adjusted terms, according to the estimate issued by national statistics agency INEGI. The fall was slightly shallower than the consensus forecast in a Reuters poll for an 8.8% decline.
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A pilots' union for Mexico's Grupo Aeromexico said it had accepted cuts amounting to $350 million on collective bargaining pacts in negotiations required for the airline to win a second tranche of bankruptcy financing, Reuters reported. The Association of Airmen Pilots (ASPA) voted to accept the reduction over the next four years to support the firm's financial restructuring, it said in a statement. Salary cuts for pilots ranged between 5% and 15%, while 79 pilots facing job cuts will be compensated under the agreement. The pilots also accepted fewer benefits, the union added.
Thousands of American tourists descended on Mexico’s glittering Caribbean beaches at the close of 2020 and start of this year. Quintana Roo state, the country’s tourism crown jewel, home to Cancun, the Riviera Maya and Tulum, received 961,000 tourists during that stretch — nearly half from the U.S. — down only 25 percent from the previous year, the Associated Press reported.
Hundreds of restaurants in Mexico City were set to welcome back diners on Monday, defying the capital’s Covid-19 restrictions in an online campaign titled “We Open or We Die,” Bloomberg News reported. Popular chains like Sonora Grill and Fisher’s said they’ll do a better job of keeping customers safe than the informal street stands and markets that have been allowed to operate under the lockdown. In a separate campaign, 500 restaurateurs including Alsea SAB, operator of chains like Chili’s and P.F.
Cinepolis de Mexico SA, Mexico’s biggest chain of cinemas, is seeking to restructure more than $1 billion in loans, Bloomberg News reported. The global movie theater giant has enlisted Lazard Ltd. for talks with lenders including Banco Bilbao Vizcaya Argentaria SA, HSBC Holdings Plc, Banco Santander SA and the Mexican government development bank Bancomext, the people said. Talks started early last month and the banks picked FTI Consulting Inc. as their adviser.
Grupo Aeromexico has wound up discussions with two labor unions but remains in talks with two more, it said yesterday in an update on negotiations that are a requirement for the airline to receive a second tranche of bankruptcy financing, Reuters reported. Aeromexico filed for chapter 11 protection in a U.S. court in June, after the coronavirus pandemic slammed the global travel industry. The carrier was approved for up to $1 billion in debtor-in-possession (DIP) financing, and received an initial $100 million payment in September.
Mexico will likely approve a bill making the central bank the nation’s dollar buyer of last resort following changes that will ease concerns it could force the institution to take illicit funds, a top senator said, Bloomberg News reported. Lawmakers will hammer out details with central bank and finance ministry officials in January, clearing the way for the lower house to approve the proposal in February, Senator Alejandro Armenta said. If the bill is modified, the senate would have to hold a final vote before it becomes law.
Latin America’s luck will change. Pandemic lockdowns caused more regional corporations to default between early May and June. But yield-starved investors will ignore some of these risks, Reuters reported. There’s a lot of bad news to ignore. The International Monetary Fund expects Latin American and Caribbean economies to contract by more than 8% in 2020, the most of any region, with only a 3.6% improvement in 2021. And non-financial companies with foreign debt have seen revenue dented by a combined $200 billion due to the pandemic, Fitch Ratings estimates.
Mexican carrier Grupo Aeromexico will continue to reactivate travel destinations throughout next year, an executive told Reuters on Monday, adding that there is still much uncertainty stemming from the coronavirus pandemic, Reuters reported. The country’s largest carrier filed for Chapter 11 bankruptcy protection in a U.S. court earlier this year and has since tried to shore up its finances.
Mexican airline Aeromexico has requested permission from U.S. bankruptcy court to dismiss 1,830 employees in a cost-saving measure to weather the economic shocks of the coronavirus crisis, according to court filings filed on Wednesday, Reuters reported. The proposed layoffs, of 855 unionized workers and another 975 who do not belong to a union, would save the company $44 million on a recurring annual basis, Aeromexico said.