Mexicana Shut Down Makes for Bumpy Ride

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    NEWSLETTERS

    AP
    A Mexicana airline Jet sits at the tarmac of the Benito Juarez International Airport in Mexico City, Friday, Aug. 27, 2010. Debt-ridden carrier Mexicana airline is halting all operations as of midnight Friday as it seeks to restructure costs, Mexico's transportation secretary said. (AP Photo/Alexandre Meneghini)

    Mexicana Airlines is no longer an option for Bay Area travelers.  It shut down operations completely at the stroke of midnight early Saturday.

    Mexicana had daily flights out of Oakland, San Francisco and San Jose.

    Mexicana stopped selling tickets Aug. 11, but there were still ticket-holders stranded by the shut down.

     The closure caused what's being described as loud chaos at San Jose International Airport Sunday as Mexicana passengers tried to get on a Volaris Airlines flight south of the border. Volaris ticket agents were reportedly met with a less than happy crowd and a line that stretched outside the airport door.

    Volaris began service between San Jose and Guadalajara, Mexico, back in April.  It is one, if not the only option for people stranded by Mexicana's demise.

    Mexicana is Mexico's biggest airline was forced to shut down because it does not have enough money to keep flying, Francisco said.

    Mexicana filed for chapter 15 bankruptcy protection in Mexico and the United States earlier this month while seeking to restructure its costs.

    In court filings, Mexicana said it was badly hit by the swine flu outbreak last year that scared away travelers for months and by the global economic slowdown. The airline added that high jet fuel prices and labor costs contributed to its financial troubles.

    Before the bankruptcy filing, the company unsuccessfully sought union agreement on pay cuts of 41 percent for pilots and 39 percent for flight attendants, along with a 40 percent reduction in employees, saying both were needed to keep the company afloat.

    Labor leaders rejected the proposal, saying their members already agreed to cuts in 2006.

    Executives said this month that the company needed an infusion of at least $100 million to keep flying, and on Aug. 21 a group of Mexican investors called Tenedora K announced it had bought a 95 percent stake in the holding company that controls Mexicana and the domestic airlines Mexicana Click and Mexicana Link.