Mexicana not selling mainline tickets

[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