The city of Chicago is suing the Mexican airline Interjet for US $2.56 million for failing to pay taxes and fees owed to O’Hare International Airport.

The newspaper Reforma reported that a lawsuit was filed against the low-cost carrier in the United States District Court for the Northern District of Illinois on June 9.

The city of Chicago alleges that Interjet has breached the terms of a 15-year contract it signed in May 2018.

The city claims that the airline failed to pay $360,000 in airport taxes between July 2019 and January 2020. It also says that Interjet hasn’t paid $1.7 million in fees for services and storage space and $334,000 in administrative fees.

According to the lawsuit, the city notified Interjet of its debts on February 18 but the airline has still not settled them. The two parties have been summoned to participate in a telephone hearing on August 10.

Reforma reported that if Interjet fails to reach a settlement with the city, it runs the risk of having its United States-based assets and/or bank accounts seized.

The airline has been plagued by financial problems for years, and was issued an order by the Mexico’s Federal Tax Administration (SAT) in August 2019 to pay off some US $27 million in back taxes. Interjet negotiated a settlement in court requiring that it pay 10% of net profits each month in order to chip away at the debt.

In April this year, the SAT placed an embargo on a property in the upscale Mexico City neighborhood of Polanco that serves as the headquarters of the Fundación Miguel Alemán, a charitable foundation set up by the family of Interjet president Miguel Alemán Magnani.

The airline responded to that move by issuing a statement that said that it had assets exceeding US $2.25 billion, more than enough to cover its current tax debt of $28.16 million. It also highlighted that it already has an agreement with the SAT to gradually pay back its tax debt.

While Interjet denies that it is in a precarious financial situation, its revenue, like that of all other airlines, has plummeted as a result of the coronavirus pandemic.

Interjet passenger numbers were down 97% in April as the airline only operated on five domestic routes, having canceled all its international flights in late March. As of Tuesday, Internet is operating 14 domestic routes, a number well below the 87 routes – including 45 international ones – it was flying in January.

Source: Reforma (sp)