Summary
- SAT Aero Holdings is suing Mexicana Airlines for $9.9 million due to multiple contract violations, including interference in procurement processes.
- President Lopez Obrador accused the US firm of breaching the contract first, establishing a public dispute between the two parties.
- Mexicana Airlines is currently operating with a rented aircraft after delays in receiving Boeing planes from SAT Aero Holdings.
SAT Aero Holdings is a US aviation company that has filed a lawsuit against Mexicana de Aviación, also known as Mexicana Airlines. The company’s initial lawsuit sought damages of $838.5 million plus another $2.4 million in other costs due to multiple breaches of their exclusive contract.
However, Mexico’s president, Andres Manuel Lopez Obrador, has publicly accused SAT Aero Holdings of instigating the breach and blaming the company.
The contract
SAT Aero Holdings was hired by Mexicana Airlines to relaunch the state-run airline. However, the US firm claims that Mexicana reneged on its contract obligations almost immediately.
Photo: Eliyahu Yosef Parypa | Shutterstock.
On Friday, SAT Aero Holdings revised its indemnification demand against Mexicana de Aviación to US$9.9 million. In the lawsuit, the firm has outlined at least four contract violations.
The lawsuit, initiated last week, alleges breach of contract, breach of the implied covenant of good faith and fair dealing, quantum meruit, and deliberate interference. According to the lawsuit, between 2022 and 2023, the airline intentionally meddled with the proceedings, waiving its sovereign immunity and opening itself up to litigation under New York laws.
The first accusation is that the airline attempted to circumvent the firm and hire pilots and flight attendants trained by SAT Aero Holdings for the operation, which harmed its interests. In addition, the airline also influenced a maintenance outfit to cancel its contract with SAT Aero Holdings and work directly with the airline.
It began in 2022 when the Mexican government contracted the US aviation firm to initiate the airline’s operations. The firm also delivered ten aircraft to the airline, claiming it has yet to receive any lease payments, which amount to $5.5 million.
The US District Court of Southern New York gave the Mexican government 21 days to respond to the lawsuit. Eight days have passed since then, and no response has been heard.
Presidential address
President Lopez Obrador defended the Mexican airline and said the US firm was to blame for first breaching the contract. He said:
“[SAT Aero Holdings] breached the contract it had signed with Mexicana. They aren’t serious people. They had agreed to deliver the planes by a certain date, and they didn’t.”
The president revived the brand in 2023 and put its operations in the hands of the military. The government wanted to create a low-cost airline to compete with Viva Aerobús and Volaris. The airline was supposed to launch earlier in the year. However, the US firm failed to deliver the 10 Boeing 737-800 by the deadline, pushing the launch back to December.
Photo: Mislik | Shutterstock.
The lawsuit outlines why the delay occurred:
“Unfortunately, after SAT spent months negotiating the relevant financing and lease documents with the prospective bank and lessors, the airline refused to sign any documents with these institutions.”
However, SAT alleged that Mexicana officials interfered in the procurement process and prevented SAT from delivering the aircraft on time. The firm also claimed that the Mexican military generals threatened the firm to sign an amendment to the contract.
Currently, the airline is operating with three Boeing aircraft procured from the military and two Embraer regional jets rented from a regional carrier.
Related
Mexicana Faces +$800 Million Suit For Breaking 10 Boeing 737 Deal
A US-based company accused Mexicana’s management of failing to sign agreements that would have allowed the company to procure aircraft.
