Mexicana airlines files for bankruptcy - Business - U.S. business - Aviation - msnbc.com
Excerpts from the announcement
MEXICO CITY — Mexicana de Aviacion, Mexico's largest air carrier, filed for bankruptcy protection after failing to reach a new labor agreement with pilots and flight attendants.
The airline has proposed salary cuts of 41 percent and 39 percent for pilots and flight attendants, respectively, and a 40 percent staff reduction to keep the company afloat.
That's a non trivial concession to ask for.
"The labor costs of (Mexicana) are well above the global average," it said.
I am trying to understand the relevance of that.
Pilots and attendants say they accepted salary cuts and gave up some benefits in 2006,
saving Mexicana around $35 million per year.
It appears that having agreed once, management is trying to see how far they'll go.
They blame the company's financial woes on poor management.
I suspect that is a root cause.
Can anyone familiar with Mexicana de Aviacion can shed some light on this?