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Mexicana Airlines Bankruptcy Strands Passengers
Filed under: Wings
Panic at Los Angeles International Airport this week as Mexicana Airlines filed for bankruptcy protection in the U.S. and Mexico. The airline has suspended some of its flights in Mexico and across the U.S. The airline has promised to give passengers refunds or to rebook them on other flights. The Wall Street Journal reports that the airline had already had several planes repossessed. In filings on Tuesday the airline said that it had lost $350 million since 2007 and listed debt of more than $1 billion.The Mexico City-based airline attributed its problems to high labor costs and also the problems afflicting Mexico's tourism industry. According to an article in the LA Times the airline says that its costs for pilots and flight attendants are far higher than those of rival airlines. It has called for new contracts that would cut the wages for pilots and flight attendants and reduce the workforce by 40 percent. The secretary general of Mexicana's flight attendants union said the comparison between Mexicana's salaries and the other Mexican airlines doesn't really make sense because those carriers offer shorter flights and a different level of service.
Mexican tourism has taken a lot of hits recently and this latest development won't help matters. In the past couple of years the combination of the global economic crisis, the swine flu epidemic and worries over violence caused by drug cartels has had the popular vacation destination fighting for tourism dollars.
Mexicana operates nearly 70 planes flying to the U.S., Canada, Central and South America and Europe. Last year alone it carried 11.1 million passengers in 2009. The airline's parent company, Nuevo Grupo Aeronautico operates two low-cost domestic airlines, Clink and Link, which will continue to operate without interruption.
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