The latest, and possibly last, attempt to revive Mexicana involves resuming limited service to the U.S. in mid-January and building a network of high-yield markets across Central and North America within five to six months.
This plan, developed by a group of investors working as PC Capital, has been approved by the airline’s pilot and flight attendant groups, and has the public backing of the Mexican Government and the carrier’s major creditors.
Ground workers are also expected to approve the reorganization plan, but are waiting for the formal approval from Mexicana’s main creditors, which could come in the first week of December.
While there is still the potential for this plan to fail, insiders suggest Mexicana could return to the skies mid-January with as few as six Airbus A320s offering services from Mexico City to Chicago, Los Angeles, Miami and New York.
The FAA safety downgrade does not affect the resumption of these flights as Mexicana already holds the rights to operate these services. However that same downgrade has stopped rival Aeromexico from assuming these routes during Mexicana’s grounding, a restriction that has boosted interest in PC Capital’s proposal.
The plan, at least tentatively, intends for the lease of up to 24 more Airbus A320-family aircraft by June, and some may even be aircraft that were leased before Mexicana’s bankruptcy. With this fleet of 30 or so A318s, A319s and A320s, the network could grow to include six key domestic markets—Cancun, Guadalajara, Monterrey, Oaxaca, Tampico and Veracruz—the addition of Las Vegas, San Antonio; Texas, San Francisco and Washington to the U.S. schedule, and nonstop services to Costa Rica, Cuba, El Salvador and Guatemala.
Nonstop flights will also resume between Mexico City and Colombia’s capital Bogota.
Frequencies on all these city-pairs will range from daily to four-a-day, a sharp contrast to the pre-bankruptcy schedule. In total, the revived Mexicana’s capacity will fall 60%.
To attain this, PC Capital had to convince employees that payroll needed to decline at similar levels. And for now it appears to have been successful with a package that pays furloughed staff 20% of their severance in cash, a further 20% after seven years with a 7% annual interest rate, and the remaining 60% in shares in the new Mexicana.
With this deal, the investors hope to reduce pilot numbers from about 780 to around 280 and flight attendants from 1,400 to about 380. Ground workers will not be as affected because PC Capital wants to maintain Mexicana’s MRO operation, so this division’s staff numbers may only fall from 3,200 to about 2,600.
Under Mexican law, a bankrupt company’s reorganization must also be approved by a majority of its creditors, and according to a source, PC Capital has gained the requisite agreements by paying all debts owed to its largest creditor and its fuel supplier, while another creditor, Banco Mercantil Del Norte, gets U.S.-held assets and shares if it approves the deal.
With these approvals, PC Capital will gain the more than 50% creditor acceptance required.
There are even bigger plans ahead, and while the revival of Mexicana is currently focused on returning to service, the new airline intends to keep all the gates at Mexico City’s Terminal 1 used by its now defunct predecessor. But this time it intends to battle new entrants such as VivaAerobus and Volaris, and increased capacity at Interjet, with a cost model akin to these low-cost carriers and not the legacy that ended service in August.
Redémarrage mi-janvier avec montée en puissance pour 5 mois
Plan approuvés par le personnel volant et supporté par le gouvernement
Réduction de voilure à 60% des vols assurés auparavant