Mexicana and its affiliates are grounded

Troubled Mexicana Airlines, which has filed for court protection from creditors, suspended operations over the weekend, and so did its two domestic affiliates in Mexico -- Mexicana Click and Mexicana Link. American Airlines reportedly put a few extra flights onto the schedule to Mexico City from some of its hubs in order to accommodate stranded passengers, and major Mexican carriers like Aeromexico, Volaris and Interjet were offering special fares to Mexicana customers. There shouldn’t have been too many stranded passengers, however, because Mexicana stopped selling tickets a few weeks ago, not long after its bankruptcy filing, and kept its planes in the air only to provide transportation to those already holding reservations. The airline had been suffering from a choked-off cash flow after the International Air Transport Association suspended Mexicana’s participation in the Bank Settlement Plan, a global clearinghouse for air tickets – a move that also hurt the two domestic subsidiaries, even though they weren’t involved in the bankruptcy filing. The grounding of Mexicana’s aircraft came just a few days after it looked like the company might finally have some breathing room. Last week, a group of Mexican investors with the name Tenedora K said it had purchased a 95 percent stake of Nuevo Grupo Aeronautico, which is the holding company that owns Mexicana and its domestic affiliates. The other five percent of the parent company is held by the airline’s pilots. The company said it a statement that although the airlines’ flights have been suspended indefinitely, the new owners will continue to look for additional investors, although they haven’t had any luck so far. Even if they find some, the new owners still face a big task, as they have to negotiate a financial restructuring with nervous creditors and come to terms with the airline’s unions for wage and work rule concessions.