Mexicana Faces +$800 Million Suit For Breaking 10 Boeing 737 Deal

Mexicana, the newly launched airline by the Mexican Secretariat of National Defense (Secretaría de la Defensa Nacional, SEDENA), was sued by a US-based company for violating its contract agreement for the management, including leasing of ten Boeing 737 aircraft.

Suing Mexicana

SAT Aero Holdings filed its lawsuit on March 27, 2024. The lawsuit, filed in the New York Southern District Court, as reported by Bloomberg, accused Mexicana of violating its agreement with the US-based company. SAT sought damages amounting to $838.5 million plus $2.4 million in costs.

The two sides entered into an aircraft, crew, management, and insurance (ACMI) agreement in August 2023, the lawsuit read. SAT was supposed to get the aircraft, as well as recruit and train pilots, enabling the Mexican government to launch Mexicana’s operations.

According to the lawsuit, the airline failed to pay $5.5 million in deposits, which would have allowed SAT to lease ten aircraft. While the company tried its best to maintain the business relationship, Mexicana’s failure to sign any potential agreements was detrimental, alleged the company.

To note, Mexican President Andres Manuel Lopez Obrador said that the airline was looking to acquire up to 20 aircraft in March 2024. Previous local media reports indicated that Mexicana would buy up to ten Embraer jets without specifying the type of aircraft that would eventually join the carrier’s fleet.

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Four aircraft fleet

Ch-aviation data showed that the Mexican airline has four aircraft in its fleet, three Boeing 737-800s and one Embraer E145. The E145, registered as XA-VGQ, is owned by Regional One, a US-based regional jet lessor, which owns and manages 164 aircraft.

Mexicana took delivery of the aircraft on November 9, 2023, a month before it launched operations. The regional jet has been in active service in the past few weeks, including operating a whopping ten domestic flights on March 27.

Meanwhile, its Boeing 737-800s, registered as XA-ASM, XA-ATM, and XA-AWM, were previously owned by Fuerza Aérea Mexicana (Mexican Air Force, FAM). Mexicana has wet-leased the trio from FAM, with the airline presumably reconfiguring the aircraft for passenger operations before introducing them into service.

Looking at Flightradar24 records for the three 737s, XA-ASM and XA-AWM had operated flights as recently as March 27. However, XA-ATM has not flown since March 18, when it operated flight MXA1105 between Monterrey International Airport (MTY) and Mexico City Felipe Angeles International Airport (NLU), with the latter being the airline’s central hub.

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Establishing Mexicana

The Mexicana brand, which initially went bankrupt in 2010, was revived on December 26, 2023, when SEDENA relaunched the airline. The goal of the new carrier was to provide air transportation services within Mexico, with the announcement reading that the airline was committed to continuously improving its operational capabilities, including safety, efficiency, and comfort.

Photo: Daniel Martínez | Simple Flying

Furthermore, Mexicana has been based at Mexico City’s new airport, NLU, since it was established. The airport, which was opened in 2022, has been at the center of disputes between Mexico and the US, including the Department of Transportation (DOT) ending antitrust immunity (ATI) for the Aeromexico and Delta Air Lines agreement.

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