Mexicana struggles to pay debts

Calcutta News.Net
Saturday 28th August, 2010

Mexicana Airlines has decided to halt all operations due to the amount of debt it is carrying.

The company started suspending flights on Friday night in an effort to maintain some breathing space as it tries to restructure costs.

The Mexico Transportation Department has been made aware of the shutdown and has said it will work with the company in the restructuring process.

The airline filed for bankruptcy protection in Mexico and the United States on August 2nd, later stopping the sale of tickets.

While it suspended some flights, the airline kept going as it tried to seek an infusion of at least $100 million.

Prior to the bankruptcy filing, the company had already reached agreement with the union on pay cuts of up to 41 percent, as well as a 40 percent reduction in employees.

On August 21 a group of Mexican investors announced they had bought a 95 percent stake in Grupo Mexicana, which controls Mexicana.

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