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Debt-ridden Mexicana de Aviacion, Mexico's largest air carrier, has filed for bankruptcy protection after failing to reach a new labour agreement with pilots and flight attendants.
Mexicana said in a statement it filed for bankruptcy Monday in a Mexico City court "to restructure its cost and insure the viability of the company."
Mexico's insolvency law, called "Concurso Mercantil," would allow Mexicana to keep operating while it looks to solve its financial problems, the company said.
Proposed salary cuts
The airline has proposed salary cuts of 41 per cent and 39 per cent for pilots and flight attendants, respectively, and a 40 per cent staff reduction to keep the company afloat.
"The labour costs of (Mexicana) are well above the global average," it said.
<span style="font-weight: bold">Pilots and attendants say they accepted salary cuts and gave up some benefits in 2006, saving Mexicana around US$35 million per year. They blame the company's financial woes on poor management.</span>
Mexicana Airlines flies to more than 65 national and international destinations, including the United States, Canada, Central and South America and Europe. Mexicana transported 11.1 million passengers in 2009, the company says on its website.
Mexicana said in a statement it filed for bankruptcy Monday in a Mexico City court "to restructure its cost and insure the viability of the company."
Mexico's insolvency law, called "Concurso Mercantil," would allow Mexicana to keep operating while it looks to solve its financial problems, the company said.
Proposed salary cuts
The airline has proposed salary cuts of 41 per cent and 39 per cent for pilots and flight attendants, respectively, and a 40 per cent staff reduction to keep the company afloat.
"The labour costs of (Mexicana) are well above the global average," it said.
<span style="font-weight: bold">Pilots and attendants say they accepted salary cuts and gave up some benefits in 2006, saving Mexicana around US$35 million per year. They blame the company's financial woes on poor management.</span>
Mexicana Airlines flies to more than 65 national and international destinations, including the United States, Canada, Central and South America and Europe. Mexicana transported 11.1 million passengers in 2009, the company says on its website.