Wednesday, June 12, 2024

Mexico president says US aviation firm breached Mexicana Airlines contract By Reuters

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MEXICO CITY (Reuters) – SAT Aero Holdings, a U.S. aviation firm hired by Mexico to relaunch state-run airline Mexicana, was accused by President Andres Manuel Lopez Obrador on Friday of breaching its contract, after SAT made similar charges in a lawsuit against the carrier.

SAT is seeking at least $841 million in the lawsuit filed last month, alleging that Mexicana reneged on its obligations almost from the start.

According to SAT, Mexicana officials failed to pay $5.5 million of aircraft lease deposits, refused to sign documents, went around SAT to directly hire pilots and crew trained by the aviation firm, and failed to obtain licenses needed to import planes to Mexico and operate them.

However, Lopez Obrador said it was SAT that “breached the contract it had signed with Mexicana.”

“They aren’t serious people. They had agreed to deliver the planes by a certain date and they didn’t,” he said at a press conference.

Lopez Obrador launched Mexicana last year by reviving the brand of a bankrupt carrier, putting it in the hands of the military.

The lawsuit said Mexicana had tasked SAT with obtaining 10 Boeing (NYSE:) 737-800 aircraft ahead of its launch, which was ultimately pushed back to December.

SAT alleged that Mexicana officials “continually cut the financial legs out from under SAT and its own actions prevented SAT from delivering the planes,” while Mexican generals even “threatened” SAT into signing an amendment to the contract.

Mexicana is operating with three Boeing planes from the military and two Embraer aircraft rented from a regional carrier.

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