As airlines across the world suffer due to coronavirus travel restrictions, Mexico’s low-cost carrier Interjet may not survive the pandemic.

Aircraft owners have repossessed at least 27 leased planes from Interjet’s fleet, already grounded since the airline stopped flying internationally at the end of March. 

The company was dealt a further blow April 17 when Mexico’s tax agency placed a notice of impending embargo on the Mexico City residence of Miguel Alemán Velasco, father of Interjet president Miguel Alemán Magnani.

Interjet was already in the midst of restructuring before the pandemic hit, and struggling with an unhealthy debt to profit ratio. The government’s embargo indicates grave concerns about the company’s solvency.

Founded in 2005, Interjet had been Mexico’s third-largest airline, operating budget flights throughout Mexico and the Americas. The company’s president is the son of a former governor of Veracruz and grandson of former Mexican president Miguel Alemán Valdés, who amassed a fortune as an early investor in Televisa. In 2017 Forbes estimated Alemán Velasco’s net worth to be US $2.5 billion, calling him one of the 15 richest men in Mexico. 

Last August the Mexican tax agency ordered Interjet to pay off some US $27 million in back taxes, although the company negotiated a settlement in court requiring that it pay 10% of net profits each month in order to chip away at the debt. At that time, Bloomberg reported that Interjet’s chief financial officer declared in a court filing that losses accumulated between 2013 and 2018  “can be interpreted as the airline’s technical bankruptcy.” 

The embattled company later denied that statement, arguing that “bankruptcy can only be declared by court order, and cannot be self-imposed by the debtor or any other entity. It’s a legal process through which the insolvency of a company has to be proved. This is not the case of the current situation of Interjet because the company continues paying its debts.” 

Not so any longer, according to tax authorities looking to seize the airline’s founder’s personal property, which in addition to the home includes a limousine, library and a replica of the presidential chair his father once sat on during very different times.

Source: Bloomberg (en), Milenio (sp)

CORRECTION: Interjet president Miguel Alemán is the son of a former governor of Veracruz and the grandson of former Mexican president Miguel Alemán Valdés. Incorrect information appeared in the earlier version of this story. We regret the error.