UPDATE: Mexicana "reactivates" London route

10 Aug 2010 by BusinessTraveller

Oneworld member Mexicana has today (August 10) reinstated Gatwick and Madrid routes, just one day after announcing their suspension.

According to the website, flights 1594 and 1595 between Mexico and London, and 1586 and 1587 between Mexico and Madrid, have now been “reactivated”.

The airline had suspended flights to Gatwick and Madrid saying that its “financial situation has deteriorated substantially in the last week”. Other international routes, suspended at the same time, remain that way.

Mexicana suspended ticket sales for international flights last week, and has now taken the decision to cut several routes in order to “optimize available resources and ensure that priority is given to homebound passengers”.

Routes from Mexico City to Sao Paulo, Buenos Aires, San Jose, Caracas, Montreal, Bogota and San Antonio have all been suspended. In a statement the carrier said:

“Although flights will be reduced to a minimum over coming days, the airline and its employees are determined to make an effort to continue operating out of concern for passengers. It is hoped an agreement will be reached with union leaders and that additional resources can be obtained to secure the financial viability of the carrier.”

Oneworld member Mexicana filed for bankruptcy protection in the US and Mexico last week, following the release of a statement saying its financial and labour situation is “no longer sustainable”.

Media reports say Mexicana has filed for chapter 15 bankruptcy protection in the US, to protect its US assets from creditors. 

The carrier, a subsidiary of Nuevo Grupo Aeronáutico, released a statement this week saying that while “concerted efforts have been made over the last four and a half years to restructure costs, efforts that have translated into savings of some US$800 million as a direct result of investment in IT systems, new routes and more efficient aircraft”, these measures “have not been sufficient to offset its crew costs”, which it claims are up to 185 per cent higher than “the average pilots flying Airbus A320s for other Mexican low cost airlines”.

The airline has registered losses of US$350 million from 2007 to date, and says it has now presented its pilots’ and flight attendants’ unions with two alternatives: effectively cuts in wages of around 40 per cent, or the sale of the airline to the unions for a token sum of $1 peso. 

However Mexicana adds that representatives of the pilots union have stated both options would be rejected, and says that “it is time to acknowledge reality, that the paradigm of commercial aviation has changed worldwide and that only airlines that operate at competitive costs can hope to survive and continue flying” The airline says it  will continue to negotiate with its unions.

Mexicana joined Oneworld in November last year (see online news November 10, 2009), having previously been a member of the Star Alliance. The carrier currently flies four-times weekly between Mexico City and London Gatwick.

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Report by Mark Caswell

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