Mexican regional airline Aeromar closed its doors on Wednesday after it failed to reach a deal with creditors or secure new capital.

The airline was a small player in Mexico’s aviation market, flying less than 1 percent of the country’s domestic seats in February, according to Diio by Cirium schedules. However, flying smaller ATR turboprops, it lacked competition on many of its routes. For example, from Mexico City Aeromar was the only airline serving Colima, Ciudad Victoria, Ixtepec, McAllen, Piedras Negras, and Tepic, Diio data show.

An Aeromar aircraft takes off
An Aeromar ATR 42. (Pete Webber/Flickr)

Aeromexico, Viva Aerobus, and Volaris — the three airlines that dominate Mexico’s domestic market — have all offered to assist travelers stranded by Aeromar’s collapse.

Aeromar said in a statement that it planned to liquidate its assets, which include 10 aircraft.

The airline’s collapse is the latest in a volatile recovery for airlines in Latin America. Three of the region’s largest — Aeromexico, Avianca, and Latam Airlines — all restructured under U.S. Chapter 11 protection during the pandemic. Mexico’s fourth largest airline, InterJet, collapsed in December 2020. And Colombia’s Viva Air filed for the local equivalent of bankruptcy earlier in February; the airline may also be the subject of a bidding war between Avianca, Latam, and Chile’s JetSmart.

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Tags: airlines, bankruptcy, latin america