Mexicana: Dead Airlines Don’t Usually Negotiate Contracts

While Mexicana may not be flying, have UBS Global Financial saying the airline is dead and people writing off the carrier … I am once again going to stick my head out on a limb, as I did in this post: Mexicana Says Goodbye With Its Future Up In The Air … and say it is likely we may see Mexicana in the skies again.

Why do I think we’ll see Mexicana flying again when many others say the airline is dead?  Because a dead airline does not tend to continue to negotiate its union contracts.

ASSA, the union representing Mexicana’s 1,367 flight attendants, has begun voting on a new proposed contract.  The contract being voted on manages to use the contract currently in place between Mexicana and it’s flight attendants while reducing flight attendant costs by 30%.

In addition to Mexicana’s flight attendants voting on a contracts, Mexicana’s pilots, represented by ASPA, who presently own 5% of the airline, are working to create a long-term contract solution that aims to reduce pilot costs by 25%.

While Tenedora K, created by Advent International, owns 95% of the grounded airline, the Mexican Government has now stepped into to assist Grupo Mexicana in securing additional investors so the airline may be re-launched and the majority of the company’s 8,000 jobs can be retained.

The future may seem bleak for Mexicana … however dead airlines generally do not have an equity investment firm with US$24bil in assets backing them, a Government seeking to get them flying again, two labour unions working to ratify new contracts and the Chapter 15 protection that protects their access to their aircraft, slots, contracts, gates and terminals.

…now I guess all we can do is sit back, wait and watch.

Happy Flying!

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