Mexicana files for bankruptcy protection

Mexicana Airlines, the busiest foreign carrier at Los Angeles International Airport, has filed for bankruptcy protection in the US and Mexico, blaming much of its financial trouble on high labour costs, reported The Los Angeles Times.

The debt-ridden airline made the announcement one day after suspending 31 flights in Mexico and across the US, including some of its departures from Los Angeles, New York, Chicago, San Jose, Sacramento, San Francisco and Oakland.

At LAX, the airline put a hold on four of 15 daily flights to Puerto Vallarta, Guadalajara and Mexico City.

The Mexico City-based airline promised to contact passengers with tickets on cancelled flights for a refund or to rebook them on another Mexicana flight or with another carrier.

Mexicana also blames its financial woes on the global financial crisis and the H1N1 (swine flu) epidemic in Mexico that has devastated the travel and tourism industry in the country.

Mexicana flies to more than 65 national and international destinations, including the US, Canada, Central and South America and Europe. It operates nearly 70 planes and carried 11.1 million passengers in 2009, according to the company's website.

The airline's parent company, Nuevo Grupo Aeronautico, also operates two low-cost domestic airlines, Click and Link, which will continue to operate without interruption, according to the airline.

In a statement, the airline said the bankruptcy protection would allow it to restructure its liabilities and "bring its cost structure, particularly labour costs, into line with market conditions".

Mexicana has put most of the blame for its financial crisis on pilot and flight attendant salaries, which the airline says are up to 185 percent higher than the pay of their counterparts at Mexican airlines such as Volaris or Interjet.
(Source:www.cargonewsasia.com)