Mexicana files for bankruptcy

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Mexicana files for bankruptcy

Unread post by bimjim » Wed Aug 04, 2010 ... 18456.aspx

Mexicana files for bankruptcy
By: Michael Fabey
August 03, 2010

Mexicana on Tuesday filed for bankruptcy protection in the U.S. and Canada, and has suspended or reduced service to several destinations.

Click here to view the routes tat have been changed.

Low-cost, domestic airlines Mexicana Click and Mexicana Link aren’t involved in the filing, said airline parent Nuevo Grupo Aeronautico.

NGA said that despite investments of over $300 million in credit lines and resources, Mexicana's current financial situation is "no longer tenable."

Efforts have been made over the last four-and-a-half years to restructure costs, but have not been sufficient to offset labor costs, the company added.

The airline continued to operate most flights Tuesday, but said in court filings that aircraft leasing companies and owners were taking steps to repossess planes. Three of its 64 aircraft have already been seized, the Wall Street Journal reported.

ARC is in discussions with Mexicana with the goal of uninterrupted processing. While these discussions are under way, ARC said it will continue processing Mexicana-validated transactions, including sales, refunds and exchanges, without interruption.

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