August 25, 2010 / 11:31 PM / 9 years ago

Mexicana airline faces new hurdle in labor dispute

MEXICO CITY, Aug 25 (Reuters) - The future of troubled Mexican airline Mexicana de Aviacion looked increasingly uncertain on Wednesday after the labor ministry said a plan by its new owners to fire its flight attendants was illegal.

A group of businessmen bought Mexicana, which brings U.S. and European tourists to Mexican beach resorts like Cancun, after it filed for court protection from creditors earlier this month.

But clouding the company’s future, the group, called Tendora K, has not said how much it will invest in the company or if it will assume the airline’s debt of about 10 billion pesos ($770 million).

Tenedora K wants to fire more than 1,000 of the airline’s flight attendants and give them lower severance payments, arguing that the company is bankrupt, Labor Minister Javier Lozano said. The company would rehire some of the flight attendants at lower wages.

But Lozano said the plan was unacceptable, creating another hurdle for the company.

“We can not validate, nor even ponder this proposal because it is illegal. We sent them back to reformulate their plan,” Lozano told Mexican radio.

Mexicana de Aviacion, one of the country’s two leading airlines, has stopped selling tickets and flying to several destinations.

Tenedora K purchased a 95 percent stake in Nuevo Grupo Aeronautico, which controls Mexicana as well as its sister regional airlines Click and Link.

Advent International helped put the deal together, but the U.S. private equity firm said it was not a shareholder.

The pilots union has agreed to wage cuts under the new owners’ conditions in exchange for a 5 percent in the holding company, but flight attendants are putting up a fight.

Officials at Tenedora K and Mexicana were not available for comment.

The airline has also requested creditor protection in the United States.

Lozano said he hoped all groups involved in the problem could strike a deal but that with no fresh money being poured into the airline, the situation looked difficult.

$1 = 12.98 pesos Reporting by Cyntia Barrera Diaz; Editing by Jason Lange, Leslie Gevirtz

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