Mexico's biggest airline is forced to shut down because it does not have enough money to keep flying, Mexico's transportation secretary Juan Francisco Molinar Horcasitas has told reporters.
You'd think the dire straits would make Mexicana de Aviacion a continued perfect match with Miami International Airport -- perhaps the two can drill for oil in the Gulf together for money? -- but the debt-ridden carrier began suspending flights Friday and will halt all operations as it seeks to restructure costs.
Mexicana "is in a process that should lead to restructuring," Molinar said.
The airline, long a presence at Miami International, filed for bankruptcy protection in Mexico and the United States on Aug. 2, and later stopped selling tickets and suspended some flights.
It is not known what portion of business at MIA is accounted for by Mexicana.The company's website says it transported 11.1 million travelers last year.
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 Grupo Mexicana, which controls Mexicana and the domestic airlines MexicanaClick and MexicanaLink. All three airlines will be grounded by Saturday afternoon.
On Friday, Mexicana said in a statement on its website that current management received the airline "in a state of technical bankruptcy."
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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, and 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.
"The financial deterioration and lack of an agreement are forcing Grupo Mexicana to stop flying," Mexicana said in its statement.
Pilots' union president Fernando Perfecto said halting operations "is necessary to achieve a neat and orderly restructuring that gives us all the opportunity to relaunch Mexicana."
