By SAT Aero Holdings, a US aviation company, has filed a lawsuit against Mexicana de Aviación, also known as Mexicana Airlines, seeking damages totaling $838.5 million, along with an additional $2.4 million in costs, citing multiple breaches of their exclusive contract. The initial lawsuit alleges that Mexicana Airlines reneged on their contract obligations shortly after hiring SAT Aero Holdings to relaunch the state-run airline.
Mexico’s President, Andres Manuel Lopez Obrador, has publicly accused SAT Aero Holdings of instigating the breach and shifting blame onto the company. SAT Aero Holdings revised its indemnification demand against Mexicana de Aviación to $9.9 million on Friday. The revised lawsuit outlines at least four contract violations, including breach of contract, breach of implied covenant of good faith and fair dealing, quantum meruit, and deliberate interference.
According to Mexico Business, between 2022 and 2023, Mexicana Airlines allegedly meddled with contractual proceedings, forfeiting its sovereign immunity and exposing itself to litigation under New York laws. The lawsuit accuses the airline of attempting to circumvent SAT Aero Holdings by hiring pilots and flight attendants directly, as well as influencing a maintenance outfit to cancel its contract with the US firm.
The dispute originated in 2022 when the Mexican government contracted SAT Aero Holdings to initiate the airline’s operations and deliver ten aircraft. However, the firm claims it has not received lease payments totaling $5.5 million. The US District Court of Southern New York has given the Mexican government 21 days to respond to the lawsuit, with no response as of yet.
President Lopez Obrador defended Mexicana Airlines, stating that SAT Aero Holdings breached the contract first by failing to deliver the planes by the agreed-upon date. He accused SAT Aero Holdings of lacking seriousness and failing to fulfill their contractual obligations. Despite the controversy, the Mexican government proceeded to revive the airline under military management in 2023, aiming to establish a low-cost carrier to compete with other domestic airlines. SAT Aero Holdings, however, alleges interference from Mexicana officials and threats from Mexican military generals, claiming they hindered the timely delivery of aircraft. Currently, Mexicana Airlines operates with a limited fleet sourced from the military and regional carriers.
