Troubled Mexicana airline stops ticket sales; will still provide flights to those with tickets

Troubled Mexicana airline suspends ticket sales

MEXICO CITY — Troubled Mexicana de Aviacion, Mexico’s largest air carrier, indefinitely suspended ticket sales Wednesday but said it would continue operating flights for travelers who already bought them.

The decision did not affect the company’s Click and Link airlines, which fly routes only inside Mexico. Mexicana flies to more than 65 domestic and international destinations, saying it carried 11.1 million passengers in 2009.

Mexicana filed for bankruptcy protection in Mexico and the United States on Monday seeking to restructure its costs and assure the viability of the company.

Its CEO, Manuel Borja, told reporters on Monday that Mexicana owes Mexican banks at least 2.5 billion pesos (US$199 million). He didn’t say what the company’s total debt is.

A press release from Compania Mexicana de Aviacion said Wednesday’s sales suspension was intended to give “more space” for negotiations with its unions, which earlier rejected the company’s demand for steep pay cuts and layoffs.

“CMA has continued to operate normally, carrying an average of 22,000 passengers daily during the last week,” the statement said.

Spokesman Armando Vera stressed that the airline would continue providing flights for ticket holders.

“People who already bought tickets will be able to fly,” he told The Associated Press, although he didn’t say how long it would continue honoring tickets.

As of Wednesday, Mexicana had 220 daily flights, almost all of them to foreign destinations. It was not immediately clear whether that amount will remain unchanged following the decision. The company’s Click and Link operations had a total of 260 daily flights, all within Mexico.

A few hours before the announcement about 200 pilots and 100 members of the Mexican Electrical Workers union protested outside Mexicana’s headquarters demanding that the airline’s chairman, Gaston Azcarraga, be removed for the financial problems.

The company sought to get unions to accept pay cuts of 41 percent for pilots and 39 percent for flight attendants, along with a 40 percent reduction in employee numbers, saying both are needed to keep the company afloat.

Labor leaders rejected the demand, saying pilots and attendants already accepted wage reductions and gave up some benefits in 2006, saving Mexicana around $48 million a year. They blame poor management for the company’s financial woes.