December 17, 2017

Mexicana Airline to Halt Operations at Midnight

PlaneMexicana airline is halting all operations as of midnight Friday to restructure costs and debt. It was forced to shut down because of lack of funds to keep flying. The airline filed for bankruptcy protection on August 2 and stopped selling tickets and suspended some flights. Court filings state that Mexicana was badly hit by the swine flu outbreak last year and by global economic slowdown. High jet fuel prices and labor costs also contributed to its financial troubles.

The airline company unsuccessfully sought union agreement on 41 percent pay cuts for pilots, 39 percent for flight attendants, and 40 percent reduction in employees needed to keep the company a float. The proposal was rejected by labor leaders members already agreeing to cuts in 2006.

To keep flying the company needs an infusion of at least $100 million. On August 21st, a group of Mexican investors called Tenedora K bought a 95 percent stake in the holding company that controls Mexicana, Mexicana Click and Mexicana Link.

According to the company's website, Mexicana flies to 65 national and international destinations including USA, Canada, Central America, South America and Europe transporting 11.1 million passengers in 2009.