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Mexicana's ordeal could benefit US carriers

Long-haul international flights suspended by Mexicana

Daniel Hernandez  Aug 09, 2010

Woes continue for Mexico's oldest airline, Mexicana, which announced on Monday the indefinite suspension of all but one of its long-haul international flights to destinations in Europe, North America and South America. Routes affected include direct connections between Mexico City and Buenos Aires; Sao Paolo, Brazil; Madrid; London; Caracas, Venezuela; Montreal and Vancouver, Canada.

What the airline said were high labor costs and competition from newer low-cost airlines thrust Mexicana into disarray last week. Cash flow troubles led to the suspension of numerous routes to and from the United States, particularly affecting airports in Los Angeles and Northern California. The airline filed for bankruptcy protection in the U.S. and Mexico, and pilots and flight attendants staged protests at Mexicana's corporate headquarters in Mexico City. On Wednesday, the airline suspended new ticket sales.

The downward slide of Mexicana could have benefits for U.S. carriers but could leave Mexican travelers with fewer air-travel options overall, aviation sector analysts told financial news services.

The route suspensions and bankruptcy filings are now negatively affecting Mexicana's domestic affiliate airlines, Click and Link. Because the Federal Aviation Administration downgraded Mexico's air safety rating on July 30, Mexicana competitors such as Volaris or AeroMexico are temporarily barred from expanding into the U.S. and possibly picking up Mexicana routes. Meanwhile, U.S. carriers already present in Mexico may see an increase in business with Mexicana's absence, analysts said.

Long-haul international flights suspended by Mexicana
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