Compania Mexicana de Aviacion (Mexicana) (Mexico City) on August 2, filed a “Concurso Mercantil” or insolvency petition with a Mexico City district court to ensure the continued operation of the Company. Likewise, a Chapter 15 petition was filed with a New York bankruptcy court in order to obtain bankruptcy protection and injunction relief in both countries.
The “Concurso Mercantil” is a Mexican legal resource that guarantees the operation of companies that are unable to meet their obligations, while protecting those companies they do business with. Similar to Chapter 11 of the United States Bankruptcy Code and other similar legislations, this recourse grants companies a reasonable timeframe in which to reorganize themselves in an orderly manner while continuing to operate.
Mexicana will continue to operate.
The company filed because CMA’s costs, particularly those associated to flight crews are well above industry average; such costs must be brought into line with market conditions to allow the Company to reach a restructuring agreement with its creditors in order to secure its financial viability well into the future.
Only CMA has filed for insolvency proceedings. Mexicana Click and Mexianca Link operate independently of CMA and will therefore not be affected by the reorganization process.
Copyright Photo: Richard Vandervord. Boeing 767-25D XA-MXO (msn 24734) heads for MEX from London (Gatwick).