The new owners of troubled Mexican airline Mexicana have appointed an administrator to run the airline group as it tries to negotiate concession packages with unions.
Tenedora K, a group of Mexican investors, acquired Mexicana’s parent company at the end of last week. To take the business forward it has appointed Alejandro Rodriguez Mirelles as the company’s administrator while Mexicana chief executive officer Manuel Borja has resigned and left the company.
The new owners are putting together a 100-day plan to financially restructure the airline and determine how much capital is needed. It will include a rethink of strategies, adjusting air operations and determining the level of support of its creditors, including banks, aircraft leasing companies and the Mexican government.
A key part will be reaching new agreements with staff, as their costs are much higher than competitors. Tenedora K said in a statement that it has reached an agreement with Mexicana pilots union ASPA covering the potential restructuring of the airline. It says it has also made progress in negotiations with the union representing Mexicana’s ground staff including mechanics.
Rodriguez said the pilots and most other staff are keen to forge new agreements and have recognised the serious financial problems that the business faces.
Talks though with the carrier’s flight attendant union, ASSA, are not progressing. It claims the union has taken a different view compared with the other employee groups and has so far not been willing to negotiate concessions. ASSA was unavailable to comment.
Rodriguez is also coordinating the ‘possible rescue’ of Mexicana’s parent company, Nuevo Grupo Aeronautico (NGA). While only Mexicana has filed for bankruptcy protection, Tenedora K has acquired the entire parent company including airline subsidiaries Click and Link.
Rodriguez has a track record in dealing with financially troubled companies. He is a former director of investment banking for Mexican bank BBVA Bancomer where he dealt with mergers and acquisitions as well as restructuring bankrupt companies.
Tenedora K also says in the statement that NGA’s financial situation and the impact of labour costs on the company’s competitive position is ‘more serious’ than it thought prior to acquiring the company on 20 August.
It says labour costs for all Mexicana employee groups need to be adjusted in order for the carrier to be competitive with other Mexican carriers and US carriers. It claims on average flight attendant costs at Mexicana are 32% higher than US majors and 100% higher than other Mexican carriers. It says lower labour costs are required for the carrier to be able to recover from the current situation and re-launch.
It adds the possible rescue of Mexicana by Tenedora K is dependent on the investment group being able to reach new agreements in the coming days with all the carrier’s unions. While Tenedora K is attempting to restructure the entire company, including the Click and Link units, so far union negotiations have focused on mainline Mexicana as the labour costs at Click and Link are already relatively in line with labour costs at Mexico’s low cost carriers.
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