Aeromexico CEO Andres Conesa announced on Tuesday that the airline’s planned listing on the New York Stock Exchange has been postponed due to unfavorable market conditions. This delay follows a previous postponement last year. While Conesa affirmed Aeromexico’s intention to go public “as soon as market conditions allow,” he did not offer a specific timeline.
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Market Timing Key to Aeromexico’s IPO
Conesa emphasized that the company is not rushing the process and the IPO will proceed when shareholders decide the time is right to sell. This suggests a strategic approach, waiting for optimal market conditions to maximize shareholder value. The decision to delay underscores the importance of market timing in successful IPO execution.
Aeromexico’s Post-Bankruptcy Ownership Structure
Aeromexico’s journey back to public markets follows its emergence from Chapter 11 bankruptcy in 2022. The restructuring resulted in a significant shift in its ownership structure. Major stakeholders now include Apollo Management, Silver Point Capital, and Delta Air Lines, its joint venture partner. Prior to bankruptcy, Aeromexico was listed on the Mexican stock exchange.
Previous IPO Attempt and Valuation
In 2022, Aeromexico filed for a New York Stock Exchange listing under the ticker symbol “AERO,” aiming to offer American Depositary Shares (ADSs). Although the offering size and price range were not publicly disclosed, media reports estimated the IPO could have raised up to $500 million. However, factors like the Mexican presidential elections contributed to the initial delay.
Scrutiny Surrounding Delta-Aeromexico Codeshare Agreement
A key aspect of Aeromexico’s operations is its codeshare agreement with Delta Air Lines. This partnership allows both airlines to sell seats on each other’s flights, making them the dominant players on U.S.-Mexico routes. However, the agreement faces uncertainty following the Mexican government’s decision to relocate some flights in and out of Mexico City. The U.S. Department of Transportation (DOT) expressed concerns and indicated it might not renew the agreement.
Aeromexico Confident in Codeshare Renewal
Despite the DOT’s initial stance, Aeromexico remains optimistic about the future of its partnership with Delta. Conesa expressed confidence that the DOT will extend the agreement after reviewing the evidence submitted by Aeromexico during the consultation period. The outcome of this decision will significantly impact Aeromexico’s market position and future growth prospects. A positive resolution will strengthen the airline’s network and connectivity, particularly within the crucial U.S.-Mexico market.
Conclusion: A Strategic Pause Before Public Listing
Aeromexico’s decision to postpone its New York IPO reflects a prudent approach, prioritizing a successful listing when market conditions are more favorable. The airline’s post-bankruptcy ownership structure, its strategic partnership with Delta, and the pending DOT decision regarding the codeshare agreement are all critical factors influencing its future trajectory. While the timeline for the IPO remains uncertain, Aeromexico’s leadership has signaled a commitment to going public when the time is right, maximizing value for its shareholders and securing a strong foundation for long-term growth.
