UPDATE 2-Union in talks to save troubled Mexican airline

* Mexicana filed for creditor protection

* Airline has stopped selling tickets

* Unions decline to identify possible investors (Recasts first paragraph with union statement, details on negotiations, company situation, adds byline)

By Cyntia Barrera Diaz

MEXICO CITY, Aug 9 (Reuters) - Employees of airline Mexicana de Aviacion are talking with investors in a bid to keep the cash-strapped carrier flying, a union official said on Monday.

Mexico's pilots union said it would meet with at least one investor group that might inject cash into the airline, which flies thousands of tourists from the United States and Europe to Mexican beaches every year.

Fernando Perfecto, head of the pilots union, is set to meet Monday afternoon with the group, union spokesman Antonio Vargas told Reuters. He declined to say who was in the group.

Analysts have suggested AeroMexico, the country's other major airline, as a potential buyer.

The union for flight attendants said earlier on Monday that three investor groups were eyeing the airline, whose situation deteriorated rapidly after it filed for creditor protection in Mexico and the United States last week.

Mexicana filed a petition in the United States under a part of the U.S. bankruptcy code that covers cross-border insolvencies. In Mexico, the airline requested creditor protection under the local insolvency law, or concurso mercantil, but has yet to be declared bankrupt by a judge.

Mexicana, one of two major carriers in the country, has stopped selling tickets and said on Sunday it was suspending 15 international routes, including one to Madrid and Sao Paulo.

It is just one airline that was hit in 2009 by a severe economic downturn in Mexico and an outbreak of the H1N1 flu that deterred travelers for months.

Mexicana, a member of the Oneworld alliance, has a debt of around 10 billion pesos ($800 million) and owns nine of its 64 airplanes.

Leasing companies have issued termination notices to the company and at least three of its planes have been grounded on creditors' concerns over the airline's payment capacity.

Workers have already rejected a proposal from Mexicana in which employees would buy the company for 1 peso plus a big chunk of the airline's debt.

The unions are looking to avoid further cuts to benefits and pay, but they also want to keep Mexicana in operation.

As of Sunday, pilots were continuing to fly without pay, Vargas said. "We will continue working ... we won't hurt operations, we have a commitment with passengers."

Vargas said the pilots had agreed during the weekend to stick to some demands as they discuss a potential acquisition of the troubled airline.

"The demands were set clear and are not subject to negotiation: we want a share stake and decision or veto power," he said.

The pilots are also looking to keep the 89-year-old Mexicana brand, which company managers have said they are not willing to give up, as part of a potential deal.

Airline experts have said low-cost carrier Volaris, which recently tapped the U.S. market with flights to California, could stand to gain with Mexicana's meltdown too.

But a recent U.S. Federal Aviation Administration decision to downgrade Mexico, on grounds its civil aviation authorities were not fully complying with global safety standards, will damage any efforts from Mexican airlines to capture Mexicana's international routes. (Additional reporting by Veronica Gomez Sparrowe, Editing by Missy Ryan and Steve Orlofsky)