Mexicana Suspends International Flights Due to Financial Trouble
 DPA
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August 09, 2010
Mexico City - Mexican airline Mexicana is to gradually suspend its international flights due to a sharp fall in its income, the firm said in a statement Monday.
Mexicana said several flights will be suspended Monday-Wednesday, including some linking Mexico to Chicago; San Antonio, Texas; Fresno, California; Madrid, London, Sao Paulo, Buenos Aires, San Jose, Caracas, Bogota and Montreal.
"(Mexicana's) financial situation has deteriorated substantially in the last week due to a series of events that have strangled the cash flows the airline needs to finance its day-to-day operations," the statement said.
"One such event was IATA's decision to suspend the carrier's BSP sales channel, forcing it to suspend the sale and issuing of tickets indefinitely," the company complained.
Last week, Mexicana filed for legal protection to restructure its debt "in an orderly way" and to cut down its costs. On Monday, the airline warned that "flights will be reduced to a minimum."
Beyond IATA's moves, the company blames its crisis on trade unions representing its employees. Mexicana says its pilots, for example, earn 49 per cent more than the average on major US airlines.
The pilots, in turn, argue that wages only amount to 5 per cent of the company's operating costs, and that Mexicana's management only wants to replace the airline with its cheap flights subsidiaries Click and Link, which have different labour conditions. |
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