SAT Aero Holdings Files $841 Million Lawsuit Against Mexicana for Contract Breaches

SAT Aero Holdings, a Texas-based company previously contracted by the Mexican government to secure Boeing 737-800 leases for the state-run airline Mexicana, has initiated a lawsuit against the carrier, demanding USD 840.9 million in damages. The lawsuit, filed under Case 1:24-cv-02300, alleges four significant breaches of their ACMI (Aircraft, Crew, Maintenance, and Insurance) contract, severely impacting SAT Aero’s efforts to assist Mexicana in commencing its operations.

According to the legal filing, the alleged breaches by Mexicana include the failure to deposit USD 5.5 million for the lease of the first two out of ten aircraft from ALM – Aircraft Leasing & Management, the omission to sign necessary financing and lease documents with banks such as NexBank Aviation LLC and other lessors, the poaching of SAT Aero’s pilots and crew, and the failure to acquire essential licenses, notably the Air Operator’s Certificate (AOC), crucial for operating the leased aircraft in Mexico.

The relationship between SAT Aero Holdings, initially known as Petrus Aero, and Mexicana began in December 2022. Notably, SAT Aero’s management team comprises several former executives from the original Mexicana airline, including a past chief operating officer.

Following the alleged contractual failures and an inability to secure the planned fleet of ten 737-800s, Mexicana, operated by Mexico’s defense ministry, had to postpone its launch. The airline resorted to wet-leasing three 737-800 aircraft from Fuerza Aérea Mexicana (FAM, Mexico City International) and two E145s from TAR Aerolíneas (YQ, Querétaro), not incurring lease fees for the Mexican Air Force planes. Moreover, TAR Aerolíneas has reportedly breached a leasing contract related to an engine on one of Mexicana’s E145 aircraft.

SAT Aero Holdings also claims to have faced undue financial penalties imposed by Mexicana for the delayed delivery of aircraft, attributing the delays to Mexicana’s non-compliance with the contract. SAT alleges coercion and intimidation by the Mexican armed forces to modify the ACMI agreement.

As Mexicana moves forward, possibly exploring an order with Embraer and receiving political support for expansion, the lawsuit presents a significant challenge. SAT Aero Holdings’ legal action emphasizes the complexities and disputes arising in the aviation sector, especially involving state-run entities. Mexicana has yet to respond to the lawsuit, and Mexico’s President Andrés Manuel López Obrador has not commented on the issue.