Mexicana not selling mainline tickets

[XR650R]

http://www.travelagentcentral.com/airline-policies/arc-stops-mexicana-airlines-processing-22957

 

[Whine Lover]

And, true to airline form, we see once again that a change of paint job could not avert bankruptcy.....


YKMKR

 

[Dornier 335]

Official statement here.

 

[GuppyWN]

Codeshare flights only?

Sounds like their future is very much in doubt. Too bad it isn't Volaris instead.

Gup

 

[B727Driver]

Simple union busting 101. Notice how Mexicana Click and others remain unaffected. Another example why Scope Clauses are the most important item in a contract. After they dump the expensive mainline pilots, Mexicana will order large aircraft for the regional carriers with much lower wages. The applicants will line up for miles for these new, lower paying jobs. Reports show Mexicana's pilot labor costs are 185% higher than Volaris.

 

[Jetjockey]

Codeshare flights only?

Sounds like their future is very much in doubt. Too bad it isn't Volaris instead.

Gup

Isn't Volaris a code share partner with SWA? With friends like this...........who needs enemies?

 

[scoreboardII]

so basically the feeders are now scabbing.

 

[Midnight Flyer]

FWIW,
Flying on Mexicana is quite the treat. Unlike the politically correct airlines in the US, they hire younger, extremely hot flight attendants. They still feed the passengers hot meals in addition to having their carts full of large bottles of alcohol.
Hate to seem them having problems.

 

[Dornier 335]

From someone who trained some of their pilots and knows a little bit about them, I'd be careful stepping onto one of their planes. Yes, the eyecandy is lovely and the free booze makes you almost forget what might (or not) go on behind that cockpit door. I am really surprised that haven't had fatalities with some of the crap they (used to) pull off.

Just three sentences of wisdom and that goes for AMX as well.

 

[Full of LUV]

Codeshare flights only?

Sounds like their future is very much in doubt. Too bad it isn't Volaris instead.

Gup

I think Volaris is part of their porblem....

 

[GuppyWN]

Isn't Volaris a code share partner with SWA? With friends like this...........who needs enemies?

Yes they are (hasn't started yet) and I will gladly piss on their grave. Yes it is cold but that's how I feel.

I am no friend of farming out flying my company is MORE than capable of doing.

Gup

 

[Dornier 335]

The plot thickens ...

from Flight International

Desperate Mexicana starts slashing network

Mexicana has been forced immediately to withdraw several services on its network after the airline's dire financial situation worsened, IATA having suspended the carrier's billing and settlement channel.
The Oneworld alliance carrier is cutting long-haul flights from Mexico City to Madrid and London Gatwick, as well as services to Sao Paulo, Buenos Aires, Caracas, Bogota and Montreal.
Mexicana says its financial position has "deteriorated substantially" but adds that, despite the "gravity" of its situation, it will "make a concerted effort to continue operating".
"Passengers already booked on flights will be the airline's priority over the coming days," it adds.
Over the past few days Mexicana's cash-flow has been crippled, the suspension of its IATA sales channel forcing it to stop issuing tickets until further notice.
The airline says this has "strangled" its income and had "serious repercussions" for sales at its regional MexicanaLink and MexicanaClick operations.
"Other sources of revenue have either dried up or are being retained by financial institutions following the company's recent decision to file bankruptcy proceedings," it adds.
Mexicana is being forced to cancel a number of flights in order to "optimise available resources", it says.
"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 adds.
"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."


Sounds like the tactic of keeping their regional and LCC flying backfired!

Edit:

I think Volaris is part of their porblem....

The main problem in Mexico is that most low-cost/regional airlines are non-union. The main union in Mexico is called ASPA (which kinda translates into ALPA) and within the Mexicana structure, only mainline Mexicana pilots are ASPA members. I believe that this will become an aviation soap opera/ novella with lots of nasty turns ahead.

 

[Dornier 335]

Update

Comment from Flight International.

Mexican wave

The long-running question over Mexican air transport's need for two major carriers could be answered with the bankruptcy of Mexicana. As natural forces play out is this another market where the survivors are a transformed network player and a low-fare upstart?

Mexicana is the first major casualty of the global financial crisis and, ironically, it fell just as both the industry and Mexican aviation were starting to recover. Airlines never collapse for only one reason, and there are plenty in Mexicana's case - a swarm of low-cost carriers, the H1N1 virus, excessive labour and fuel costs - but one cause near the top of this list has to be the financial markets.


Mexicana announced in May that it would offer a $250 million bond issue in June to clean up its balance sheet before next year's initial public offering. At the same time other airlines were pulling back debt and equity offerings because the capital markets had soured. CFOs around the world wondered how Mexicana could pull it off in the face of such conditions. In fact, it didn't. The $250 million that it planned to raise in the markets has become the scaled-back $100 million to $150 million that chief executive Manual Borja says Mexicana must find in order to survive. Because it failed to sell its bonds, it desperately seeks most of those funds now as a rescue.


AFTER THE BLAME GAME
Beyond the question of whether it can raise this money and how to assign blame looms the bigger question of what Mexican aviation will look like after this bankruptcy. Even if Mexicana survives short-term, questions will persist about the longer-term structure of aviation in Mexico. Transport officials have argued since the days of Cintra, when both Mexicana and Aero*****mexico were owned by the government, that the two airlines should merge.


The competition commission, which has the final say, blocked Mexicana from bidding to buy Aeromexico in 2007, but it has not expressed an opinion since it declared several years earlier that privatisation of the two carriers should be to separate owners. How the same commission would view this question today is hard to say, but merger talk is hypothetical because Aeromexico's owners insist they are not interested in owning or merging with Mexicana.


Nonetheless, this long-running debate could still be nearing its end. If Mexicana dies in bankruptcy, that answers the question of whether Mexico should have one or two major airlines. Even if Mexicana survives, it can only do so by shrinking.
Depending on how much, that too could answer the question. The end of this debate, like a Greek tragedy, could play out several ways. But whichever way it ends, it will be written by economic realities, not by competition officials.
If this is the case, it is instructive to look at the experience in other countries that faced similar debates. Canada, for example, had two legacy carriers - Air Canada and Canadian.



Many argued that the country was not big enough for both of them. Canadian Airlines is now gone, replaced by WestJet, a low-cost carrier that has grown to become Air Canada's domestic rival. The same story played out in Australia - Qantas and Ansett has become Qantas and Virgin Blue. And in Brazil, TAM is the surviving legacy airline, while its low-cost rival Gol has replaced the number two and three legacy carriers - Varig and Vasp.
In all three countries, two or three legacy carriers confronting the same type of low-cost assault as Mexicana and Aeromexico face in Mexico, proved to be one or two too many. In Canada, Australia and Brazil a major low-cost carrier has since emerged to replace all but one surviving legacy airline. It may only be coincidence, but the low-cost carrier in each country has also developed a blend of low-cost and network carrier attributes. The specifics vary, but the outcome has been the same.
Will this also happen in Mexico? Mexicana will struggle to prevent it, but as this unfolds we are likely to be witnesses to an inevitable and natural evolution.

 

[Dornier 335]

UPDATE!

300+ pilots furloughed as of yesterday (about 40%). No severance pay, no pay for last month's work. Remaining pilots took a huge cut and lowered themselves to MXA Click's pay.

The plot thickens ...

 

[Raoul Duke]

Simple union busting 101. Notice how Mexicana Click and others remain unaffected. Another example why Scope Clauses are the most important item in a contract. After they dump the expensive mainline pilots, Mexicana will order large aircraft for the regional carriers with much lower wages. The applicants will line up for miles for these new, lower paying jobs. Reports show Mexicana's pilot labor costs are 185% higher than Volaris.

How do scope clauses work in Mexico? I think you are comparing apples to oranges (or Jalapenos).

 

[B727Driver]

No se amigo. I heard jalapenos burn on the way out.

 

[Dornier 335]

B727Driver, does she have a lot of pitch-down movement?

 

[GuppyWN]

Aero California (again), Mexicana, and hopefully Volaris.

Sounds like some of you hot shot "real" airline pilots need to talk to schedule planning.

Gup

 

[Dornier 335]

Aero California (again), Mexicana, and hopefully Volaris.

Sounds like some of you hot shot "real" airline pilots need to talk to schedule planning.

Gup

??? I don't think I am quite following you. Or maybe my coffee hasn't set in yet.

 

[Old School 737]

27 Airbus to be returned to leasing Co.

http://www.travelweekly.com/article3_ektid219236.aspx

 

[GuppyWN]

??? I don't think I am quite following you. Or maybe my coffee hasn't set in yet.

I was making reference to pilots thinking we know how to run the airline. United, Delta, AA etc should swoop in and take the Mexicana routes.

Gup

 

[St. Nic]

I've been through this first hand and do not wish it on anybody- the huge cuts, the furloughs, the uncertainty. Some white knight will come along and keep the company solvent yet the pilots will stay on bankruptcy wages. It is sad how history repeats!

 

[Dornier 335]

Don't worry st. nic, I hear usapa is working their asses off to get an industry leading contract!:laugh: That is if they can find the time after stealing so many jobs from the west pilots, and keep themselves out of court for just a minute.

Ask the Delta rampers and gate agents in Mexico how much they were pressured by Atlanta to take a sub-standard contract. In their eyes this situation that MXA is doing to the pilots and f/a's is what Delta did to them a year ago or so.

BTW what does your enchanting USAPA comment have to do with MXA's situation? Take your personal diatribe somewhere else, there are plenty of dysfunctional threads out there.

(Ira furor brevis est)

 

[Lear70]

Moderator Hat On:

Scope Out RJ's suspended for 7 days for discussing an East/West issue in an non-related thread.

People have been fairly warned about this. The penalty WAS going to be 30 days, and will be after this. Going to be nice and only give Scope 7 days...

Knock it off. Keep threads on-topic.

/mod

 

[Dornier 335]

Mexicana's new owners appoint administrator, negotiate with unions
By Brendan Sobie

Mexicana's new owners have appointed an administrator to run the airline group as it tries to negotiate concession packages with the carrier's unions.

Tenedora K, a group of Mexican investors which acquired Mexicana's parent company at the end of last week, says in a 25 August statement that it has appointed Alejandro Rodriguez Mirelles as the company's administrator. Grupo Mexicana CEO Manuel Borja left the carrier at the end of last week.

Tenedora K also says in the statement it has reached an agreement with Mexicana pilots union ASPA covering the potential restructuring of the airline. It says it has also made progress in negotiations with the union representing Mexicana's ground staff including mechanics, SNTTTASS.

Rodriguez in the statement applauds the willingness of the carrier's pilots, ground personnel and non-unionised employees to forge new labour agreements and their recognition of the serious financial situation Mexicana currently faces.

However, Tenedora K says talks with the carrier's flight attendant union, ASSA, are not progressing. It claims the union has taken a different view compared with the other employee groups and has so far not been willing to negotiate concessions. ASSA was unavailable to comment.

Tenedora K says Rodriguez is coordinating the "possible rescue" of Mexicana's parent company, Nuevo Grupo Aeronautico (NGA). While only Mexicana mainline filed for bankruptcy protection early this month, Tenedora K has acquired the entire parent company including airline subsidiaries Click and Link.

Rodriguez has a financial background, formerly serving as director of investment banking for Mexican bank BBVA Bancomer. Tenedora K says this job involved restructuring bankrupt companies as well as dealing with mergers and acquisitions. Rodriguez also has served in management positions at various companies in the tourism, consumer goods and industrial sectors.

Tenedora K also says in the statement that NGA's financial situation and the impact of labour costs on the company's competitive position is "more serious" than it thought prior to acquiring the company on 20 August. But a Tendedora K spokesman declined to elaborate or say how much capital the new ownership group has so far put into Mexicana to keep it operating while a restructuring attempt is initiated.

Tenedora K says labour costs for all Mexicana employee groups need to be adjusted in order for the carrier to be competitive with other Mexican carriers and US carriers. It claims on average flight attendant costs at Mexicana are 32% higher than US majors and 100% higher than other Mexican carriers. It says lower labour costs are required for the carrier to be able to recover from the current situation and re-launch.

It adds the possible rescue of Mexicana by Tenedora K is dependent on the investment group being able to reach new agreements in the coming days with all the carrier's unions. While Tenedora K is attempting to restructure the entire company, including the Click and Link units, so far union negotiations have focused on mainline Mexicana as the labour costs at Click and Link are already relatively in line with labour costs at Mexico's low-cost carriers.

 

[Dornier 335]

The Plot Thickens ...

Mexicana’s new owners have not yet put forward any capital: Unions
By Brendan Sobie

Mexicana's new owners are apparently waiting to see if they can complete agreements with the carrier's unions before deciding whether to invest in the bankrupt carrier.

Investment group Tendora K purchased Mexicana parent company Nuevo Grupo Aeronautico (NGA) on 20 August and subsequently stated that new labour agreements are essential for the carrier to be rescued. Two of Mexican's unions tell Flightglobal that Tenedora K has not yet put any capital into the company, which means they have nothing to lose if they decide to walk away from the proposed rescue.

Tenedora K has declined to disclose how much it paid to acquire its 95% stake in NGA or how much it has so far has invested in the company. But former owner Grupo Posadas announced its 30% stake in NGA was sold to Tenedora K for a symbolic amount and Tenedora K is believed to have only paid a symbolic one peso for the entire 95% stake. The other 5% is still owned by Mexicana pilots union ASPA.

An ASPA spokesman says Tenedora K has not yet provided any capital and Mexicana is currently operating by relying mainly on credit which the government and government-owned companies have agreed to temporarily provide. He says this credit is allowing Mexicana and sister carriers Click and Link to receive fuel in Mexico and accrue navigation, airport services and other charges without pre-payment.

Private airport operators also were ordered by a Mexican court earlier this week to continue providing services to Mexicana although the company has not been paying its bills.

A spokesman for Mexicana flight attendants union ASSA also says "there's no investment from Tenedora K right now".

But unions acknowledge there is a risk that Tenedora K can walk away from the deal before investing any capital. Tenedora K has already stated that in closely examining the company's accounts since agreeing to buy NGA on 20 August, it has discovered the financial condition of the company is more severe than originally thought.

The ASSA spokesman says the union is also concerned Tenedora K has no interest in the airline industry and could be a short-term investor. But both the ASSA and ASPA spokesman say the unions are confident Tenedora K will be able to complete agreements with all the company's unions by early next week and once these deals are finalised the new owners will finally make an initial investment.

If Tenedora K decides to back out, it is expected the government would likely continue to provide the credit necessary to keep Mexicana operating while the unions lead the search for an alternative investor. The ASPA spokesman says other investors expressed interest in acquiring the company and spoke to the unions last week. But he says ASPA is currently only working with Tenedora K.

He says Click, Link and Mexicana are all currently operating roughly one third of their pre-bankruptcy schedules. As a result most employees are working reduced hours.

Employees also have not received any salary since Mexicana filed for bankruptcy early this month. The hope is employees and suppliers will later receive payment for services rendered during Mexicana's financial crisis.

The ASSA spokesman says the union has been told some flight attendants will receive next week a reduced salary for August of no more than 10,000 pesos ($770).

 

[Ky.BrownBourbn]

B727Driver, does she have a lot of pitch-down movement?

NO, but i bet she can float like an Airbus in the Hudson (nose Up)!
KBB

 

[Dornier 335]

Just found another site where MXA's death is announced:

Mexicana airline to shut down Saturday

Troubled airline blames high labour costs

Mexican interests launch new airline, Vuela
Mexico seeks bids to privatize two airlines
Slump, flu, visas prompt AeroMexico to withdraw from Canada

Published on Friday, Aug. 27, 2010 3:58PM EDT
Last updated on Friday, Aug. 27, 2010 4:29PM EDT


Mexicana de Aviacion, one of Mexico’s two major airlines, will cease operations by midday Saturday, Mexico’s Transport Minister Juan Molinar told reporters Friday.

“At midnight, a gradual shutdown will begin,” Mr. Molinar said at a news conference. “By Saturday at noon, operations will definitively cease.”

Two budget carriers affiliated with Mexicana, Link and Click, will also stop flying, Mr. Molinar said.

The 89-year-old airline filed for protection from creditors at the beginning of the month but struggled to find a buyer willing to help restructure its $800-million debt load.

Plans to fire some 1,000 of its flight attendants to facilitate a takeover by a Mexican investment group were blocked earlier this week by the government.

Mexicana has already stopped selling tickets and has cancelled flights to some destinations.

Mexicana controls many routes into the United States which would be among its most valuable assets. But restrictions slapped by U.S. aviation authorities on Mexico due to safety lapses mean Mexican airlines are not able to take over these routes for now.

Mexicana is part of the Oneworld alliance, whose members include American Airlines, British Airways and Lan.

 

[Ky.BrownBourbn]

NO, but i bet she can float like an Airbus in the Hudson (nose Up)!
KBB

I guess That's off topic, I may be getting suspended, see you guys after I get probation and I'm on work release!

KBB