MEXICO CITY, Aug 10 (Reuters) - Debt-ridden airline Mexicana de Aviacion needs a cash injection of at least $100 million to keep flying, the company’s chief executive said on Tuesday.
“What we are looking for is between $100 million and $150 million,” Chief Executive Manuel Borja said in an interview with Radio Formula.
Time is ticking for troubled Mexicana, which has ceased flying more than a dozen international routes and stopped selling tickets after requesting creditor protection last week under Mexico’s insolvency law, or concurso mercantil. The company has yet to be declared bankrupt.
Mexicana pilots have not been getting paid since Sunday, their union said. Mexicana’s financial troubles are already leading to lost sales at its sister regional airlines, Click and Link, as passengers avoid the two.
The airline’s main shareholders and employees are separately looking for investors that can inject money into the ailing airline.
The pilots and flight attendants unions were meeting this week with potential partners in hopes they could strike a deal. Borja said Mexicana shareholders were doing the same.
Analysts have suggested AeroMexico, the country’s only other major airline, as a potential buyer.
Mexico’s air industry was hit hard 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. (Reporting by Cyntia Barrera Diaz; Editing by Steve Orlofsky)