www.CostaRicaTicas.com

Struggling Mexicana airline halting all operations

Associated Press

MEXICO CITY -- Debt-ridden carrier Mexicana airline is halting all operations as of midnight Friday as it seeks to restructure costs, Mexico's transportation secretary said.

The country's biggest airline was forced to shut down because it does not have enough money to keep flying, Juan Francisco Molinar Horcasitas told reporters.

But Mexicana da Aviacion ``is in a process that should lead to restructuring,'' he said.

The airline filed for bankruptcy protection in Mexico and the United States on Aug. 2, and later stopped selling tickets and suspended some flights.

In court filings, Mexicana said it was badly hit by the swine flu outbreak last year that scared away travelers for months and by the global economic slowdown. The airline added that high jet fuel prices and labor costs contributed to its financial troubles.

Before the bankruptcy filing, the company unsuccessfully sought union agreement on pay cuts of 41 percent for pilots and 39 percent for flight attendants, along with a 40 percent reduction in employees, saying both were needed to keep the company afloat. Labor leaders rejected the proposal, saying their members already agreed to cuts in 2006.

Executives said this month that the company needed an infusion of at least $100 million to keep flying, and on Aug. 21 a group of Mexican investors called Tenedora K announced it had bought a 95 percent stake in the holding company that controls Mexicana and the domestic airlines Mexicana Click and Mexicana Link.

Mexicana flies to more than 65 national and international destinations, including the United States, Canada, Central America, South America and Europe. It transported 11.1 million passengers in 2009, according to the company's website

Read more: http://www.miamiherald.com/2010/08/27/1 ... z0xuKckWyG

A little problem with Brother XMan00's post (and I've run into this myself)--it's a subscriber-only article, so it cuts off abruptly before you get to the details.

Aeromexico Offers Support for Stranded Mexicana Passengers

Mexican airline Aeromexico said Saturday it is offering special fares for ticket holders of rival carrier Mexicana, which suspended all flights as it struggles to remain afloat.

Aeromexico said in a statement its program will be in effect from August 27 to September 20 for routes which it operates in common with Mexicana. People using the program will be subject to waiting lists to board flights.

Mexicana operated daily flights to San José, Costa Rica, from Mexico D.F.

Low-cost carriers Interjet and Volaris, in notices posted on the Internet, also offered special rates for Mexicana passengers.

Grupo Mexicana, which runs Mexicana de Aviacion and domestic airlines Mexicana Click and Mexicana Link, suspended all flights at midday local time Saturday. Itineraries had already been slashed since early August, when Mexicana de Aviacion filed for bankruptcy protection in Mexico and the U.S.

Aeromexico, which has international destinations in the U.S., Costa Rica, Colombia, Brazil, Argentina, Spain and Cuba, said it was also adding flight frequencies between some key domestic destinations and Mexico City.

Mexicana said Friday its flights were being suspended indefinitely as an investment group that took over ownership of the airlines a week ago has been unable to secure investment commitments for the company.

Mexicana said that continuing to operate flights without selling new tickets made its financial situation even worse, and added that a number of suppliers were demanding payment up front for goods and services.

Government officials said Friday that the bankruptcy petition will continue, as will a search for potential investors.

If Tenedora K includes Carlos Slim and because of the pilots union investment, expect Mexican to be flying again sooner rather than later:

Quickly, check with other airlines to see if they'll honor the ticket. They often do.

SR