Mexicana to cease operations

Mexicana, formerly Mexico’s largest international carrier, has announced that they will cease all operations as of today. The airline filed for bankruptcy protection just over three weeks ago and shortly thereafter ceased ticket sales in most markets. Given the lack of new revenue it was only a matter of time before the airline would be forced to shutter its operations. Earlier in the week the airline’s parent company was purchased by a group of investors for an undisclosed amount of money. At that time the Tenedora K group suggested that they planned to recapitalize the company and bring them out of bankruptcy. It is not clear how the cessation of operations will affect those plans.

The cessation will affect not just the Mexicana mainline and international operations but also those of the domestic services from MexicanaClick and MexicanaLink. Those carriers were not part of the previous bankruptcy filing. Still, the new owners have made it rather clear that they are not going to operate as before and that drastic measures will need to be taken for the carrier to recover. As noted in their announcement of the flight suspensions:

Among the factors that have contributed to this announcement are:

1. Grupo Mexicana’s fragile financial situation, which has deteriorated further over the last four weeks due to the previous management’s decision to suspend ticket sales, forcing the company to continue operating in the interests of passengers without receiving any revenue.
2. No substantial agreements were reached to give companies in the Group long-term viability.
3. Lack of effectiveness in the insolvency (Concurso Mercantil) process intended to protect additional financial resources available to the company so it could to continue operating.
4. Given the uncertainty of the situation, certain suppliers have begun demanding advanced payment of services that are essential to the airlines’ operations.

While the new consortium does still intend to resume operations at some point it is not at all clear what form those operations will take. At least the writing was on the wall long enough that hopefully there aren’t too many folks stranded by this move.

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• Mexicana ceases ticket sales on most routes