TODAY: A group of Mexican investors, known as Tenedora K, has purchased controlling shares of the bankrupt airline. The remaining shares approximately 5% will be owned by the Mexicana pilots union. The investors goal is “rescuing them from the critical financial and operating situation they are in,” viewing the acquisition as the first step in turning the struggling airline around. Next week the consortium will release its ‘100 day plan’ outlining the amount of capital they will pledge to restructure the company.
UPDATE: Mexicana is gradually reducing its flight operations as a result of its bankruptcy filing last week cutting 40% of pilot and flight attendant jobs in the process. Routes from Mexico to Costa Rica, Madrid, London, Colombia and Brazil will be suspended effective today. Flights to the U.S. are in the processing of being eliminated. Flights to San Antonio, San Francisco, Chicago and Fresno have been identified as the most likely to be effected by the reduction in operations.
UPDATE: As of Wednesday night Mexicana has suspended ticket sales but will honor tickets for flights already sold. The airline is flying approximately 28 flights to and from the U.S. and thus far has canceled three flights since the bankruptcy filing.
ORIGINAL: 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.