Unions Back Mexicana Revival

Mexicana de Aviacion’s latest revival plan has been approved by the company’s three main unions, a hurdle that now enables the carrier potentially to resume service in late January.

The most recent restructuring of the bankrupt carrier envisions a Jan. 24 relaunch with a fleet of as many as 19 Airbus narrowbodies, a slight delay but a larger fleet than intended in a plan revealed to Aviation Week late last month (Aviation Daily, Nov. 24).

According to sources close to the deal, final details have still to be determined, but for now the Mexican operator’s backers, led by PC Capital, still hope to introduce service to key U.S. cities, including Chicago, Los Angeles, Miami and New York, before expanding the network across North, Central and South America and to high-yield domestic destinations with as many as 40 aircraft.

The fleet size is also in question, although Mexicana has access to as many as 10 Airbus narrowbodies through a deal with its major creditor Bancomext. Mexicana is also in talks with vendors that had leased aircraft to the pre-bankrupt carrier, including Orix, which confirms that it left its two Airbus A320s in Mexico because of the carrier’s possible return.

Other lessors, including GE Capital Aviation Services, are also in Mexico to discuss possible new leases, although attempts to keep GECAS’s A318s in Mexicana livery ended after the lessor decided to place the airframes with Colombian carrier Avianca.

Orix also says its aircraft “are in great condition” and are being maintained by Mexicana MRO. That division plays a key role in the new Mexicana’s plan, which was confirmed last week when it was granted the equivalent of Chapter 11 protection by a Mexican court.

Before this protection, several stakeholders had wanted to sell Mexicana MRO to raise much-needed liquidity for the new operator. Instead, it will now generate revenue for the company as the region’s largest MRO operation.

Launch Date Under Debate

Details about the launch date are also under debate, and there appears to be some confusion about Mexicana’s ability to load a new schedule, which has already delayed the Jan. 15 launch planned last month. This could further affect the Jan. 24 launch date, depending on how quickly the company can start selling new tickets.

According to a source, the new company may attempt to return to service just two to three weeks after the first tickets are available. Initial plans had stipulated a month's lead time.

Now that union approval has been attained, the company’s new investors are expected to proceed with a mass layoff and the re-employment of about 30% of the crews in the first week of January.

The investors are also talking with other finance groups, including those that proposed rival bids to the Mexican government, although the initial funding amount of $150 million for now remains unchanged. Several creditors must also be paid before the relaunch, particularly LSG Sky Chefs, although according to a source most of the major debts, notably to airports on the initial route network, have been repaid.