Mexicana Airlines Files
August 5, 2010 -
Mexicana Airlines filed a “Concurso Mercantil” or insolvency petition
is licensed as Compañía Mexicana de Aviación (CMA)it was the first
airline established in
Its primary hub is
competitor is Aeroméxico, although the two companies “code-share” on
several routes and was merged for more than a decade. It is North
America's oldest airline and the world's third oldest airline operating
under the same name, after the
Mercantil” is a Mexican legal resource that guarantees the operation of
companies that are unable to meet their obligations, while protecting
those companies they do business with. Similar to Chapter 11 of the
United States Bankruptcy Code and other similar legislations, this
recourse grants companies a reasonable timeframe in which to reorganize
them in an orderly manner while continuing to operate.
Passengers will not be affected as part of the proceedings, since CMA will continue to render services normally while it restructures its liabilities and brings its costs into line with market conditions. Likewise, Click and Link’s operations will not be affected as these airlines are independent of CMA, and therefore independent to the proceedings.
particularly those associated to flight crews are well above industry
average; such costs must be brought into line with market conditions to
allow the Company to reach a restructuring agreement with its creditors
in order to secure its financial viability well into the future.
hands in 2006, CMA has made aggressive efforts to boost productivity by
expanding and renewing fleet, enhancing its route network, as well as
introducing state of the art technologies. These measures have
translated into improved operating efficiency, savings in excess of
US$800 million and has contributed resources superior to US$350 million.
initiatives helped offset a sharp drop in demand for air services due to
the global financial crisis and the AH1N1 flu epidemic of 2009, the
Company’s current cost structure makes it financially non-viable.
Consequently, CMA is negotiating new collective labor contracts with its
unions, and is confident they will result in a positive outcome enabling
the Company to continue offering its customers world-class services at
Under Mexican law,
once the insolvency filing has been accepted, the judge will order the
Company to continue operating to ensure services are not interrupted and
that consumers are not adversely affected. The judge will also appoint
an expert to oversee the proceedings up to the conciliation phase,
during which CMA will attempt to reach a restructuring agreement with
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