Financial woes see Mexicana cut US flights

Financial woes see Mexicana cut US flights

International airline Mexicana has been forced to cancel a number of routes as financial woes threaten the future of the company.

Citing “operational needs” the airline confirmed it would be suspending four daily flights from Los Angeles International Airport (LAX) to Mexico until at least September.

Destinations include Puerto Vallarta, Mexico City and Guadalajara. A complete list of the cancelled flights can be seen here.

Mexicana presently operates some 15 daily departures from LAX, carrying 1.3 million passengers annually.

It is the busiest foreign-based airline at the airport.

However, executives at the Mexico City-based airline met with investors on Friday to discuss the possibility of filing for bankruptcy. No decision was taken at the meeting, but the financial future of the airline remains in doubt.

In May, Mexicana delayed the planned issuance of $250 million in five-year bonds after the airline failed to secure a partial loan guarantee from government development bank Bancomext.

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Pilot Unrest

The cancellations follow protests over the weekend, which saw over 500 pilots and cabin crew demonstrate inside Benito Juarez International Airport in Mexico City.

Sharp pay cuts are expected at the airline, along with substantial job losses – prompting anger among employees.

The pilots and flight attendants unions have asked President Felipe Calderon to intervene, but the federal government has so far declined to step in to bail out the airline.

Passengers affected by the cancellations will be rebooked onto other Mexicana flights or with other airlines.

However, the impact is unlikely to be severe. Mexicana is the a member of the OneWorld alliance, making it easier for the carrier to transfer passengers to replacement flights, while the summer travel season to Mexico is already winding down.

Mexicana spokeswoman Theresa Bravo said: “Mexicana laments the inconvenience to passengers with these cancellations.”

Federal Aviation Administration

In further trouble for the Mexican aviation sector, the United States Federal Aviation Administration (FAA) has announced it will downgrade the country’s aviation safety rating.

The move follows concerns over the country’s safety oversight.

As a result Mexican airlines - such as Aeromexico and Mexicana – will be barred from expanding their service in the US.

The airlines will also be barred from carrying passengers to and from the US on code-sharing agreements with US-based airlines.