Following a protest by workers who say they haven’t been paid since September, the budget airline Interjet made a commitment Tuesday to transfer one fortnightly salary payment to employees this week.
But its capacity to do so is in doubt – one of Interjet’s owners acknowledged that the airline doesn’t have any money.
The federal Interior Ministry said it organized a meeting Tuesday night between Interjet, its workers and representatives of their union where the airline agreed to pay one quincena, or fortnightly payment, to workers this week.
Interjet executive president Alejandro Del Valle, one of the company’s new owners, told workers before the meeting that the airline hoped to make one salary payment on Tuesday or Wednesday.
Speaking to workers protesting outside Interjet’s offices at the Mexico City airport, Del Valle said the airline actually hopes to pay three quincenas by the end of the week but he also acknowledged that it doesn’t have any funds.
He said the situation is complicated for the airline due to its lack of cash flow and unpaid tax commitments. Interjet canceled all its flights on both Sunday and Monday, apparently because it was unable to pay for fuel.
Despite its lack of cash and tax problems, Interjet is aiming to add 16 planes to its fleet and increase its capacity to attract more passengers, Del Valle said.
“A company with 5,000 employees can’t operate [profitably] with four planes,” he said.
“We ordered 16 planes; we can’t bring them [all] due to a lack of cash flow [but] there is a possibility that we’ll bring the first three,” Del Valle told the protesting workers.
The disgruntled employees blocked the Circuito Interior freeway outside Interjet’s airport offices for several hours on Tuesday to demand payment of salaries and benefits.
One maintenance worker told the newspaper El Financiero that employees haven’t received their last four salary payments.
“They haven’t paid us since September,” said the employee who asked to remain anonymous.
The worker said that some benefits, including uniform allowances, housing credits and health insurance payments, haven’t been paid since March.
Interjet has been plagued by problems this year as airlines around the world struggle to stay afloat amid the coronavirus pandemic and resulting decline in demand for air travel.
The federal tax agency SAT placed an embargo on property belonging to the father of Interjet president Miguel Alemán Magnani due to the airline’s unpaid tax bills, 25 of its leased aircraft were repossessed, the city of Chicago launched legal action against it for failing to pay taxes and fees owed to O’Hare International Airport, customers are preparing a class action suit against it over the constant cancellation of flights and its reimbursement practices and the Canadian Transportation Agency suspended its license to operate in Canada for failing to have liability insurance coverage.
And all that was before this week’s cancellations due to Interjet’s apparent inability to purchase fuel.
According to the airline, the cancellations on Sunday and Monday affected 2,690 passengers but the consumer protection agency Profeco disputed that number, saying that more than 3,000 people were left stranded.
Profeco issued a statement on Tuesday, warning people of the risks of buying flights with Interjet due to the airline’s repeated cancellations. It said that it has received 1,542 complaints from dissatisfied Interjet customers this year.
“Interjet doesn’t provide certainty, fairness or legal security to consumers,” Profeco said. “Profeco informs and alerts [potential customers] about the risk of establishing commercial relationships with Interjet.”
When a flight is canceled, airlines under Mexican law are required either to refund passengers the cost of their ticket or put them on another flight at no extra charge. In addition, they must pay 25% of the value of the ticket in compensation.
However, there is evidence that Interjet hasn’t been complying with the law.
Passengers who have indicated they will sue the airline say that Interjet is guilty of practices that have caused customers to lose significant amounts of money.
According to Pablo Martínez Castro, the moderator of a Facebook group called Queja Colectiva a Interjet (Collective Complaint Against Interjet), one illegal practice is that when a flight is canceled, Interjet issues customers with vouchers for amounts less than what they paid for their tickets.
As a result they are forced to pay extra when rebooking a flight on the same route, he said.
There is also evidence that Interjet is not paying the 25% compensation within 10 days as required. One passenger affected by a flight cancellation this week said that she was also stranded by a cancellation in March.
However, Andrea Lozada said that eight months later she still hasn’t received any financial compensation.