Boutique firm picked to rescue troubled Mexicana

Mexicana de Aviacion has picked the business plan from a tiny Mexican boutique investment firm as the best option to return the troubled airline to the skies by year-end, reported Reuters.

Mexicana de Aviacion, one of Mexico's two major airlines, ceased operations in late August, grounding travellers in Mexico and abroad and leaving thousands of ground workers, pilots and flight attendants with no jobs.

Its affiliated carriers, Link and Click, also stopped flying.

Mexicana de Aviacion said that the company's administrator in charge of evaluating its possible restructure and a judge-appointed mediator chose PC Capital's plan as the option that could inject life back into the ailing airline but no financial terms were disclosed.

Their pick was backed by the communications and labour ministries.

Mexicana de Aviacion, Link and Click were granted creditor protection in Mexico and the United States and have unsuccessfully tried to restart operations as several investors approached them with aggressive staff-cutting plans but insufficient money to pay lagging salaries and severances.

The 89-year-old airline said that it has been represented in the restructuring negotiations by Arturo Barahona, a former chief executive at Mexicana's top rival AeroMexico.

Mexicana controlled many routes into the United States, which were its most valuable assets. But restrictions slapped by US aviation authorities on Mexico due to safety lapses mean Mexican airlines are not able to take over those routes for now.

The airline needs to restructure at least US$800 million in debt.
(Source:www.cargonewsasia.com)