Mexicana Airlines (Grupo Mexicana) suspends its operations indefinitely

8/31/20101:06:10 PM Link 0 comments | Add comment

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Grupo Mexicana deeply regrets any inconvenience caused to passengers, however Mexicana Airlines, MexicanaClick and MexicanaLink flights will be suspended until further notice. Grupo Mexicana will continue seeking out ways of securing the company's long-term financial viability, so passengers can once again enjoy the quality services they are accustomed to. Grupo Mexicana hopes to be back in the air soon and would like to thank everyone involved in this process for their support and understanding.
 
For information on how to apply for a refund, visit www.mexicanainforms.com (Tickets issued in the United States and Canada; or contact us at 888-882-9994 or 877-801-2010 from the U.S. or Canada.

Mexicana Air Seeks Creditor Protection In Mexico, US

8/5/20109:10:42 AM Link 0 comments | Add comment

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http://news.airwise.com/story/view/1280922157.html
 

Mexicana Seeks Creditor Protection In Mexico, US
 

August 4, 2010

Mexicana filed for creditor protection in Mexico and the United States after management and employees failed to agree on wage and staff cuts.
Mexicana, a member of the Oneworld alliance, is expected to operate close to normal, though the airline has cancelled a few flights.
One of two leading Mexican airlines, Mexicana flies routes connecting the United States, Canada and Europe with beach resorts such as Cancun and Puerto Vallarta.
"On August 2, 2010, Mexicana initiated the Concurso Proceeding... by submitting its voluntary petition to commence a case under the Mexican Business Reorganization Act," the company said in a New York filing dated Monday. Mexico's insolvency law is called "Concurso Mercantil."
The company and other Mexican airlines were battered by Mexico's deep recession in 2008 and 2009 and by an outbreak of H1N1 flu the same year that hit tourism hard.
Mexicana, with a debt of close to MXP10 billion pesos (USD$796 million), also filed for Chapter 15 bankruptcy in New York to fend off any legal actions from creditors.
Talks between the managers and union workers of Mexicana de Aviacion reached an impasse on Monday.
Managers of the 89-year-old airline want to cut staff and wages, which they say are bloated and above those of US peers.
At the same time, in the Chapter 15 filing, Mexicana cites a rise in energy prices and the flu epidemic as the main culprits behind the reorganisation.
Mexicana said on Monday it wants to cut pilot and flight attendant wages by close to 40 percent.
But workers refuse to have their benefits shrink further after giving up multiple benefits in 2006, a measure that has saved Mexicana around USD$35 million per year.
"We don't have any other option than continue negotiating," Fernando Perfecto, head of the pilots' union said on Tuesday after learning Mexicana had filed for creditor protection.
"We are not going to stop working, on the contrary, we will continue business as usual," he said, dismissing any possibility of a strike.
Lizette Clavel, who heads the flight attendants union, said on Tuesday the creditor protection filings came as a surprise to unionised employees.
Workers have been granted the option to buy out Mexicana for one peso by assuming a big part of the debt and agreeing to drop the company brand name. Managers and other board members want to keep the Mexicana brand for two regional airlines, Click and Link, which have avoided the financial troubles that plague Mexicana de Aviacion.
"We reject the fraudulent intention of making Mexicana de Aviacion file for creditor protection since this means sharing the loses while privatising the gains by leaving Click and Link out of the proceedings," the flight attendants union said in an advertisement in local media on Tuesday.
FLIGHT TWEAKS, DOWNGRADE
According to a report on the company's website, Mexicana has adjusted 28 flights to and from mostly US destinations and suspended three flights.
Three company aircraft, two in Canada and one in Chicago, have been grounded since last week at the request of creditors. The company owns nine of the 64 aircraft in its fleet.
Some companies leasing aircraft to Mexicana have issued notices of default to Mexicana, the company said in the filing. "Some of those notices of default were followed by termination notices, and notices demanding that aircraft be grounded."
Local airport operators OMA, GAP and Asur all depend on Mexicana and rival AeroMexico for a significant part of their revenue.
Adding to the troubles of the country's airline industry was last week's US Federal Aviation Administration downgrade of Mexico for not fully complying with international safety standards set by the International Civil Aviation Organisation (ICAO).