Troubled Mexicana has secured a commitment from its unions to defer wages for two months as it seeks a cash infusion to keep operating in creditor protection.
As it formally sought restructuring on 3 August Mexicana explained its high mainline labour costs were a driving force behind its weak financial state, and said it needed a 41% wage reduction from pilots and a 39% cut from its flight attendants.
The situation remains in flux. During the last few days Mexicana has cut a number of flights, but has reinstated long-haul services to London and Madrid, while keeping a presence in other markets through frequency cuts.
As it seeks an investor to provide a $100 million to $150 million cash injection, Mexicana has agreed to give pilots and flight attendants stock in Grupo Mexicana, the holding company for the mainline carrier, low-cost unit Click and regional operator Link.
An investor that pledges the cash to Mexicana would also receive stock in Grupo Mexicana.
"Given the airline's cash flow problems and precarious financial situation, time will be a determining factor," says Mexicana. "However, the fact that the company's unions have agreed to revise collective contracts in the interest of cost efficiency is a major step toward financial viability."
Documents filed in Mexicana's US Chapter 15 proceedings show in 2009 Mexicana mainline posted a 2.2 billion peso (US$173 million) loss for 2009 and a 1.8 billion peso loss for the first six months of 2010.
Mexicana Link and Mexicana Click are not included in Mexicana's restructuring.
Source: Air Transport Intelligence news
