Grupo Mexicana de Aviacion, (Mexicana) filed for bankruptcy protection, in Mexico and the U.S., from its creditors after it failed to obtain new labor agreements from its pilots and flight attendants to lower operating costs. The company has approximately $796million in debt and has had some of its aircraft seized by creditors due to lack of payment. The filing will protect its assets while it reorganizes it finances.
The company had been struggling financially as a result of higher fuel prices and declining tourism as the result of the global recession and Mexico’s swine flu epidemic. It has significant assets in the U.S. and flies more than 17,000 flights annually between the U.S. and Mexico. The 87 year old company was sold by the Mexican government in 2005 to Grupo Posadas SAB
Mexicana had hoped to attract new investors with a better performing balance sheet and lower operating costs. It has one of the highest operating costs for an airline in the country. The filing will not affect any flights or routes maintained by Mexicana.