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Mexicana to Suspend All Flights by Tomorrow After Last Week's Acquisition
Compania Mexicana de Aviacion will ground all flights by tomorrow at noon local time, said Nuevo Grupo Aeronautico SA, the holding company for the airline.
The suspension will affect all operations, including the low-cost airlines MexicanaClick and MexicanaLink, the company said today in an e-mailed statement.
Tenedora K, the group of investors that bought the majority of Mexicana last week, will seek additional capital to inject into the company, Communications and Transportation Minister Juan Molinar Horcasitas said separately. Mexicana will start reducing flights today, Horcasitas told reporters in Mexico City.
The group of investors acquired a majority stake on Aug. 20, and the country’s pilots’ union holds 5 percent. Mexicana filed for protection from creditors in Mexico and under Chapter 15 of the U.S. Bankruptcy Code on Aug. 3, after executives said they failed to reach cost-saving agreements with labor unions.
Tenedora K, which was formed to buy Mexicana, said last week that the purchase was “the first step in order to establish the conditions that will eventually allow for a process of restructuring.”
The Mexican companies Grupo Industrial Omega SA and Grupo Arizan are among Tenedora K’s investors, according to a statement. The sellers included Grupo Posadas SAB, Mexico’s largest hotel operator.
The Chapter 15 petition, which bars U.S. creditors from seizing planes or canceling contracts, listed more than $500 million in assets and $1 billion in debt.
Over 65 Destinations
Before filing for bankruptcy protection, Mexicana flew to more than 65 national and international destinations, including in the U.S., Canada, Europe and Latin America. In 2009, the company transported 11.1 million passengers, according to its website.
The airline operated 69 planes under the Mexicana brand and 35 aircraft under MexicanaClick, which it started in 2005. MexicanaLink, a separate unit unveiled last year, has 15 planes, according to the website. Mexicana also has 165 sales locations.
Mexicana is part of the Oneworld alliance, sharing reservations and destinations with carriers led by AMR Corp.’s American Airlines and British Airways Plc.
Grupo Posadas originally acquired a stake in the carrier from the government in 2005. Mexicana’s biggest rival, Consorcio Aeromexico SA, is owned by Citigroup Inc.’s Banamex unit and private investors, and Volaris and Interjet are also closely held.
To contact the reporters responsible for this story: Jose Enrique Arrioja in Mexico City at jarrioja@bloomberg.net; Crayton Harrison in Mexico City at tharrison5@bloomberg.net
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