Mexicana Lands in Bankruptcy Protection

As expected, Mexican airline Mexicana has filed for bankruptcy protection in the US and Mexico. The Chapter 15 and Concurso Mercantil protections will give the carrier “time to restructure its liabilities in an orderly manner and bring its cost structure, particularly labor costs, into line with market conditions,” says the debtor. It plans to also negotiate new collective contracts with its labor unions, offering them the choice of a package of pay cuts and job cuts, or the option of shareholders in parent Nuevo Grupo Aeronautico selling Mexicana to the unions for MXP1, plus the assumption of $120m debt. The airline says it will continue to operate normally. It does not return a request for comment on the hiring of a financial advisor.