Judge declares Mexicana airline bankrupt

A Mexican judge has declared Mexicana de Aviacion, one of Latin America's oldest airlines, bankrupt and ordered the sale of the debt-ridden company's assets, a court said on Friday.

The company, founded in 1921, had suspended its operations in August 2010 and was under a form of bankruptcy protection allowing the company to negotiate with creditors and make restructuring plans.

Investors expressed interest in the company but a financial rescue never materialized, despite extensions given by the court to provide the company more time to find a solution.

A district judge declared the company "in a state of bankruptcy" and ordered the sale of "rights and assets" to pay back lenders, the Federal Judicial Council said in a statement.

Two subsidiaries, Click and Link, were also declared bankrupt.

When it suspended operations, Mexicana had US$786 million in assets and debts totalling US$864 million.

The airline used to fly to 22 countries, carrying 22,000 passengers per day. The company had 8,500 employees who have held protests demanding their jobs back.

A union official vowed to appeal the judge's ruling.

"What we care most about is the workers and that their rights are upheld," Ricardo del Valle, secretary general of the Flight Attendants Union Association, told Radio Formula.

The attorney general's office has sought since February the arrest of Mexicana's former owner, Gaston Azcarraga. Authorities asked help from Interpol, the global police agency, because they believe he left Mexico.

SOURCE

Mexican airport suspends operations due to volcano

A handful of US flights were cancelled at two Mexican airports on Friday after ash from a nearby volcano fell in central Mexico, authorities said.

Alaska Airlines voluntarily cancelled a flight from Los Angeles to Mexico City's international airport and the later trip back to California, airport spokesman Jorge Gomez told AFP. The rest of the airport, however, was operating normally.

The small airport of the central city of Puebla, located just 25 kilometres (15 miles) from the Popocatepetl volcano, suspended its operations as a safety precaution "due to the abundant presence of ash," the transportation ministry said in a statement.

This forced the cancelation of six flights, including a United Airlines flights to Houston, Texas, an American Airlines trip to Dallas, Texas, and four domestic routes operated by Mexican carriers Volaris and Aeromexico, it said.

Two cargo flights were also affected, the ministry said, adding that clean up crews were deployed to pick up ash from the runway and roads.

The Popocatepetl volcano has been rumbling periodically since May, spewing huge columns of ash that prompted several US airlines to cancel dozens of flights into and out of Mexico City last week.

Last Saturday, authorities raised the alert level around the volcano to Yellow Phase III, one notch below evacuations of residents who live near the 5,452-meter-high (17,887-foot-high) "Popo," as it is locally known.

The Mexican capital is only 55 kilometres (35 miles) from the snow-capped volcano.

In its latest bulletin, the National Disaster Prevention Centre reported that the volcano had spewed steam and ash accompanied by medium intensity explosions early Friday that blew glowing rocks up to two kilometres (1.2 miles) from its crater.

SOURCE

Volcanic ash is a pain in the butt for commercial aviation. It is highly damaging to jet engines and airlines will not want to risk flying in unsafe airspace. Flight cancellations will cause losses for them, but when safety is concerned, some profit will have to be compromised.