Mexicana de Aviación Cancels Flights As Its Finances Deteriorate

August 10, 2010 By Staff

The tail of a Mexicana de Aviación airbus.

Today in Latin America

Top Story — Mexicana de Aviación, one of Mexico’s most important airlines, cancelled several international flights on Monday, in an effort to cut costs due to an increasingly bleak financial picture.

Flights to destinations including Madrid, London, Chicago, Bogotá and São Paulo have been suspended in order to cope with debts estimated at $800 million.

Following unsuccessful talks with trade unions aimed at reducing costs, the airline filed for bankruptcy protection last week, according to Business Week. The company’s proposal included pay cuts for employees and a 40 percent reduction of the workforce, The BBC reports.

Mexicana de Aviación’s precipitous decline owes to two principle causes, according to news reports. The Lost Angeles Times notes that the company has faced increasing competition from smaller, no-frills airlines. The BBC cites the devastating impact of Mexico’s 2009 recession, coupled with the losses suffered by the tourism industry from the swine flu epidemic last year.

The troubled airline is using its Twitter account (@mexicana_com) to announce updates to its customers.

Mexicana de Aviación, Mexico’s first airline, is one of the oldest in the world, according to The Los Angeles Times. Its decline could spell disaster for Mexico’s airline industry, as U.S. companies move to plug the opening in the market. The company’s downturn could also potentially reduce consumer choice for Mexican airline customers.

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Headlines from the Western Hemisphere

North America

Governor of Texas Rick Perry personally asked President Obama to send 1,000 U.S. troops to the U.S.-Mexico border when the president arrived in Austin Monday.
Vicente Fox, Mexico’s former president, said in a blog post that Mexico should legalize the sale of narcotics to combat violent drug cartels.

Caribbean

Former U.S. president George W. Bush will visit Haiti on Tuesday, his office said Monday.
Haitian children have taken to begging in the Dominican Republic since January’s massive earthquake.
Grammy-winning musician Wyclef Jean’s bid for the Haitian presidency has garnered another critic: his former Fugees bandmate, Pras.

Central America

Sixteen former prison officials in Guatemala are being sought for their role in a 2006 prison riot in Guatemala City that killed 7 inmates.
A year after their son disappeared in Rincón de Vieja National Park, Costa Rica, a U.S. couple is continuing their search without the help of Costa Rican authorities.

Andes

Colombia’s brand-new vice president underwent heart bypass surgery Monday after he was rushed to the hospital with severe chest pains just two days into his term.
Colombian President Juan Manuel Santos and Venezuelan leader Hugo Chávez will meet Tuesday in the Caribbean city of Santa Marta, Colombia, in an apparent bid to restore diplomatic relations.
Newly nominated U.S. ambassador Larry Palmer will not be allowed to take up his post in Caracas after criticizing Venezuela’s socialist government, President Hugo Chávez said Sunday.
Allegations raised by U.S. energy company Chevron that a video shows Ecuadorian agents plotting against it are taken out of context, a filmmaker said.
Bolivia is building defenses against foreign “poachers” allegedly targeting the country’s minerals and natural resources.

Southern Cone

Paraguayan President Fernando Lugo’s communications minister announced that the president’s prognosis was good and said he would fly to São Paulo Tuesday for additional testing after Lugo was diagnosed with cancer over the weekend.
Chilean President Sebastián Piñera appealed for international help to rescue 33 miners trapped in a collapsed gold and copper mine in northern Chile.
In a visit to Buenos Aires, Spanish judge Baltazar Garzón said he would work with the Argentine foreign minister to pursue human rights projects in Argentina.
Uruguayan soccer stars Diego Forlán and Luis Suárez will not participate in the country’s upcoming friendly against Angola this Thursday.
An ex-soldier from Britain became the first man known to have walked the length of the Amazon River on Monday.

Image: KristaLAPrincess @ Flickr.

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