Mexican airline Mexicana de Aviación has secured bankruptcy protection, allowing the carrier to continue operations during its financial restructuring.
The organisation filed for bankruptcy protection earlier this week, as it suspended flights and fought staff demonstrations over restructuring plans.
Ticket sales were subsequently suspended as Mexicana continued to insist departures would continue to operate as normal.
According to court filings, Mexico’s largest airline has $786 million in debts and $865 million in revenues. As such, it is hoping to reach a restructuring deal with creditors without having to disrupt day-to-day operations.
The company’s fleet comprises 65 aircraft from European manufacturer Airbus and two US-made 767 from Boeing.
It transports some 22,000 passengers on 220 daily flights.
However, creditors have seized three aircraft to date, with fears further developments could lead to the cancellation of flights.
Air Canada retook two aircraft loaned to Mexicana in Calgary last week.
The airline has been hit by falling demand in Mexico and an outbreak of the H1N1 virus which hit international travel to the country.
“In order for Mexicana de Aviación to continue operations and to protect the company, passengers and its creditors, a series of temporary injunction relief measures have been granted to prevent creditors from exercising their rights over outstanding debt obligations,” explained a statement.
“Such measures are subject to negotiations with Mexicana de Aviación’s creditors and unions.”
The airline had earlier attempted to kick off negotiations with pilots and flight attendants, citing high wage bills as a key factor in the bankruptcy proceedings.
The airline proposed a cut in pay of up to 41 per cent along with the axing of 700 jobs.
Unions have so far rejected the proposals, with staff at the airline staging a number of impromptu protests in Mexico City.
Both MexicanaClick and MexicanaLink are operated independently of Mexicana, and are therefore unaffected by the process.