Saturday, 7 August 2010

Mexicana Airlines is bankrupt

One of Mexico's largest airlines, Mexicana ("Companiaa Mexicana de Aviacion") filed for bankruptcy protection from its creditors (including ticket holders) in both Mexico and the USA on 3 August 2010.

For now, Mexicana is still operating some flights, despite having had some of its planes repossessed, shortly before the bankruptcy filings, for non-payment of leasing fees.

Unlike most airlines that are operating in bankruptcy, Mexicana is not selling any new tickets, at least for now. That might seem an odd way to return to profitability, but apparently it's intended to put pressure on Mexicana workers, serving as a (costly) threat to liquidate the company and eliminate their jobs entirely if they don't agree to even greater cuts in wages and benefits.

My updated FAQ About Airline Bankruptcies is focused on airlines and ticket sales in the USA. Laws, including, bankruptcy and consumer protection laws, vary from country to country, and I'm not a lawyer. But even if Mexicana resumes selling tickets, I recommend strongly against buying tickets on any bankrupt airline.

Bankruptcy is your final warning that an airline could be shut down and liquidated at any time, by order of the bankruptcy courts. if that happens, you are likely to lose everything you paid for your tickets. You might be able to get some of the taxes back, but even that is uncertain, at least in the USA, according to information one of my readers recently received (see the comments) from the U.S. Department of Transportation.

Link | Posted by Edward on Saturday, 7 August 2010, 07:26 ( 7:26 AM) | TrackBack (0)
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All advice and recommendations are the personal opinions of Edward Hasbrouck, and do not necessarily represent the views of my publishers, employers, or clients.