Mexicana May Not Be As Dead As Analysts Suggest It Is

The saga of Mexicana Airlines is complex and can be frustrating for those involved with the airline and passengers who have been impacted by the airline ceasing its flight operations, as I recently wrote about here – Mexicana Says Goodbye With Its Future Up In The Air.

Recently there have been some interesting movements within Mexicana, including the Unions negotiating contracts and the Mexican Government working to secure investors in Mexicana, which I had written about two weeks ago here –  Mexicana: Dead Airlines Don’t Usually Negotiate Contracts.

Just a few days ago more movement within Mexicana suggests a reshaped and streamlined airline could possible reemerge in time to capitalize on the coming winter holiday peak travel season. With Mexican courts formally granting Mexicana bankruptcy protection, comparable to United States Chapter 11 protection on the 7th of September … in addition to Mexicana’s   Chapter 15 bankruptcy protection in the U.S … the airline is now able to focus on restructuring.

Well, Mexicana has a few hurdles to over come before they can really focus on restructuring …

…even with bankruptcy protection in both the United States and Mexico a number of Mexicana’s lessors have received permission from the courts to repossess their aircraft, such as the International Lease Finance Company (ILFC) removing five Airbus A319s and an A320 from Mexicana’s fleet. Despite Mexicana’s dwindling fleet, some aircraft leasing companies, including ILFC, are reviewing their contractual obligations and their ability to work with Mexicana to build a smaller more cost effective fleet.

So … where does this leave Mexicana’s potential to fly again?

An interesting move being discussed within Mexicana is building a route network that serves North American and Central America, without the airline operating any mainline network domestically, as well as shedding its European routes.

Mexican dropping its trans-Atlantic routes is no surprise with the removal of its two 767-25DER, two 767-3P6ER and two Airbus 330-243 aircraft from its fleet, and these routes can potentially be folded into code-share flights with OneWorld Alliance partners British Airways and Iberia … now what about domestic traffic? A Mexican flag carrier airline cannot survive without flying within Mexico can it?

Presently Mexicana’s parent company is seeking bankruptcy protection for its two subsidiary airlines, Mexicana Link and Mexicana Click.  Both Mexicana Link and Mexicana Click operate under their own Air Operators Certificate (AOC) and with their own fleets.

Mexicana Click has always been focused on domestic traffic, and the 18 Boeing 717-2BL aircraft in Mexicana Click’s fleet will be used to create a domestic non-mainline feed for Mexicana. In addition to Mexicana Click, Mexicana Link, a regional airline within Grupo Mexicana, presently based at Guadalajara International Airport (GDL), has a fleet of 15 Bombardier CRJ-200ERs, configured for 50 passengers, to provide an onward non-mainline feed network for Mexicana.

The bankruptcies for Mexicana Link and Mexicana Click are expected to be formalized with the a month … however if the bankruptcies for the two subsidiary airlines are not filed with the courts in Mexico before the October 1st they may not be able to begin selling tickets in time to reach the volume of sales required to sustain the airline’s potential for surviving in the future.

So, now Mexicana is in a race against the clock. The company is being sustained on a small amount of income received by clients who paid overdue debts, including the Mexican Government.

If the airline cannot begin selling tickets for the peak winter traffic by the middle of October, and secure aircraft to fly the developed route structure, it would seem that the oldest continually operating airline, flying under its original name in the Americas (and the second oldest in the world) will have flown its last flights on the 28th of August.

Happy Flying!

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