Mexican Government Wants Mexicana Flying Again By December

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Mexico's government is hopeful that the troubles of grounded airline company Mexicana will be resolved in time for the December travel season, when millions of local and foreign tourists will flock to resorts such as Cancun for holidays, a government official said. "Our goal must be that Mexicana returns to the skies by the December high season," Labor Minister Javier Lozano said at a press conference Wednesday, according to a transcript from the ministry, Dow Jones Daily Bankruptcy Review reported. Mexicana de Aviacion, the country's oldest legacy carrier, stopped flying last month along with domestic subsidiaries MexicanaClick and MexicanaLink, as the company seeks to raise capital and restructures in bankruptcy. But as the authorities work with unions and Tenedora K, the opaque investor group that owns Mexicana, to raise capital and get the airline flying again, rivals are stepping in to fill the void left behind by Mexico's former top carrier of passengers. In the past week, Mexican airlines Aeromar and Aeromexico have expanded domestic capacity. Aeromexico, Mexicana's main rival, local budget carriers Interjet and Volaris, and American Airlines are all offering special fares for Mexicana ticket holders. Lozano said he met last week with Alejandro Rodriguez, the investment banker who was recently named administrator of Tenedora K. "The talks with them are going very well, we need to just break this vicious cycle generated by the lack of information that doesn't allow a good business plan to be projected, which would allow the injection of fresh capital," Lozano said. Days before Mexicana suspended operations last month, Lozano said on a local radio station that he rejected a proposal by Tenedora K to lay off three-quarters of the airline's flight attendants, and added that he wasn't optimistic about the investors' plans to rescue the carrier. Communications and Transport Minister Juan Molinar said Tenedora K won't be able to save the airline without help from additional investors. The flight attendant and pilots unions, as well as government officials, have been saying for weeks that they're in talks with unnamed investors who could help get Mexicana back on its feet. Lozano said Mexicana will likely be a much trimmer company if it survives, with a smaller fleet and fewer routes, "but also with management that's professional, serious, responsible, with capital, with bargaining agreements that make the business viable," Lozano said.