Interjet: 5 Lessons from Failure That Will Save Your SME

Interjet 's fall was more than the bankruptcy of an airline; it was a masterclass in business mistakes. Ignoring its lessons is a luxury no SME can afford. Here, we break down its story so you don't repeat its mistakes.

Founded in 2005 by the Alemán family, Interjet was born with the promise of offering a flight experience superior to that of low-cost airlines, but at a competitive price. For years, it seemed to work. It won a place in the hearts of Mexican travelers with more space between seats and friendly service. By 2019, it controlled 20% of the domestic airline market.

But beneath the surface, the plane's engine was already smoking. On December 11, 2020, the airline suspended all operations, overwhelmed by debt and a lack of liquidity. Finally, on April 10, 2023, it was officially declared bankrupt, putting an end to one of Mexico's most turbulent business histories.

Its failure is a textbook of what not to do. Studying it isn't morbid, it's business intelligence. Here are the five crucial lessons your SMB should learn from this fallen colossus.

"A business doesn't die from a single blow, but from a thousand small, poorly addressed cuts. The Interjet case is the perfect example."

* Interjet's Mistake: Interjet's original sin was disastrous fiscal management. The company accumulated a massive debt with the Mexican government (SAT, Airports and Auxiliary Services, etc.) that began in 2013, long before the pandemic even appeared on the radar. This debt, which amounted to billions of pesos, wasn't a secondary issue; it was the direct catalyst for its collapse. Already in 2019, a court order to pay a fraction of its back taxes put it into "technical bankruptcy."

* The Lesson for Your SME: Listen carefully: Tax money (VAT, ISR) is never yours. It's money you collect for the government. Using it to finance your operations, a practice known as "riding the money," is one of the most dangerous and common temptations for an SME. It may seem like a short-term solution to a liquidity problem, but in reality, you're setting off a time bomb. A debt with the SAT can lead to the freezing of your bank accounts and paralyze your business overnight. Debts with suppliers are negotiated; tax debts put you under execution.

A culture of financial integrity isn't a luxury; it's a necessity. This means, from day one, completely separating personal and business finances, hiring an accountant (even if only part-time), and understanding that the SAT's money is sacred. Slower but financially sound growth will always be superior to rapid growth built on a foundation of fiscal sand.

* Interjet's Mistake: In a decision that would determine its fate, Interjet opted for a fleet of 22 Russian Sukhoi Superjet 100 aircraft. The idea was to reduce costs, but the result was a strategic disaster. The planes suffered constant technical failures, and worse, obtaining spare parts was a logistical and financial nightmare. This forced the airline to "cannibalize" some aircraft—disassemble them and use their parts in others—to keep part of the fleet flying. This decision not only skyrocketed maintenance costs but also destroyed its brand promise by causing countless delays and cancellations, eroding customer confidence.

* The Lesson for Your SME: Don't be seduced by "super prices" on assets that are critical to your operation, whether it's machinery, software, vehicles, or specialized equipment. Cheap, when it comes to the heart of your business, almost always comes at a high price. Before buying, investigate beyond price: What is the maintenance cost? How easy is it to get spare parts or technical support? What is the manufacturer's reputation? A poor investment in a key asset can become an anchor that sinks your operation, your productivity, and your cash flow. It's like a restaurant buying a cheaper oven that breaks down every two weeks, bringing the entire kitchen to a standstill during peak hours.

* Interjet's Mistake: Interjet's numbers were impressive on the surface. As we mentioned, they had a huge market share. However, the company was operating with negative operating cash flow. That is, in its daily operations, it was spending more money than it was generating, despite its multi-million-dollar sales revenue. The ultimate reason for its closure was brutally simple: they didn't have the money to pay for jet fuel.

* The Lesson for Your SME: This is perhaps the most important lesson of all. You can sell millions and still go bankrupt if you don't have cash in the bank to pay payroll, rent, or your suppliers. You must learn to differentiate between profit (the gain you see on your income statement, which is a snapshot on paper) and cash flow (the actual money coming in and out of your bank account). The survival of your business doesn't depend on the former, but on the latter. A business without sales is bad, but a business without cash is dead.

* Interjet's Mistake: The airline suffered a chronic identity crisis. It never clearly defined its business model. It attempted to be a hybrid: it wanted to compete on price with low-cost airlines like Volaris and Viva Aerobus, but at the same time offered the benefits of a traditional airline (more space between seats, complimentary drinks and snacks). This lack of definition created an unsustainable cost structure that made it less profitable than its direct competitors.

* The Lesson for Your SME: You must know exactly who you are and who you sell to. Are you competing to be the cheapest? The highest quality? The one that offers the best customer service? Or are you focusing on a very specific niche market? Trying to be all things to all people is the quickest recipe for failure. Your cost structure, pricing, marketing, and operations must be perfectly aligned with a clear and defined strategy. If you don't know what your main value proposition is, your customers won't know it either.

* Interjet's Mistake: It's easy and tempting to blame the COVID-19 pandemic for Interjet's downfall. However, the data is overwhelming: the company was already financially bankrupt long before then. As we saw, it was already "technically bankrupt" in 2019 and had been carrying tax debts since 2013. The pandemic wasn't the disease; it was the final blow to an already dying body.

* The Lesson for Your SME: An external crisis—be it a pandemic, an economic recession, a devaluation, or the arrival of a disruptive competitor—doesn't create problems in a healthy business; it simply reveals and accelerates them. A business with solid finances, a clear strategy, efficient operations, and a loyal customer base can weather the storm and even emerge stronger. A fragile business, leveraged by debt and poorly managed, collapses at the first gust of wind. Resilience isn't improvised in the midst of a crisis; it's methodically built during good times.

Interjet's failure is an incredibly valuable and inexpensive learning opportunity for you. You don't have to make the same mistakes to learn from them. Use these five lessons as a checklist to audit the health of your own business:

• Are you up to date with your taxes?
• Are your key tools and assets a strength or a liability?
• Do you know and manage your cash flow weekly?
• Do you have a clear and defined strategy?
• Are you building a resilient business for the next crisis?

Analyze, adjust, and strengthen your business. Ensure your journey as an entrepreneur is long, high, and successful.

This article offers general guidance and does not constitute personalized business, financial, or legal advice. Every business is unique. We recommend consulting a professional for your specific situation.