Posted by Seth on August 28, 2010 under News | 
Mexicana, formerly Mexico’s largest international carrier, has announced that they will cease all operations as of today. The airline filed for bankruptcy protection just over three weeks ago and shortly thereafter ceased ticket sales in most markets. Given the lack of new revenue it was only a matter of time before the airline would be forced to shutter its operations. Earlier in the week the airline’s parent company was purchased by a group of investors for an undisclosed amount of money. At that time the Tenedora K group suggested that they planned to recapitalize the company and bring them out of bankruptcy. It is not clear how the cessation of operations will affect those plans.
The cessation will affect not just the Mexicana mainline and international operations but also those of the domestic services from MexicanaClick and MexicanaLink. Those carriers were not part of the previous bankruptcy filing. Still, the new owners have made it rather clear that they are not going to operate as before and that drastic measures will need to be taken for the carrier to recover. As noted in their announcement of the flight suspensions:
Among the factors that have contributed to this announcement are:
- Grupo Mexicana’s fragile financial situation, which has deteriorated further over the last four weeks due to the previous management’s decision to suspend ticket sales, forcing the company to continue operating in the interests of passengers without receiving any revenue.
- No substantial agreements were reached to give companies in the Group long-term viability.
- Lack of effectiveness in the insolvency (Concurso Mercantil) process intended to protect additional financial resources available to the company so it could to continue operating.
- Given the uncertainty of the situation, certain suppliers have begun demanding advanced payment of services that are essential to the airlines’ operations.
While the new consortium does still intend to resume operations at some point it is not at all clear what form those operations will take. At least the writing was on the wall long enough that hopefully there aren’t too many folks stranded by this move.
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Posted by Seth on August 4, 2010 under News |
After filing for bankruptcy protection yesterday in both Mexico and the United States, Mexicana, the oldest airline in North America, has ceased ticket sales in most markets. This cessation occurred at 7pm EDT today, August 4, 2010. The company insists that it will continue to operate flights for passengers who have already booked seats but that seems increasingly unlikely as the ability to generate further revenue to fund operations has been terminated.
The bankruptcy filing yesterday was half of a double-whammy of pain that the airline recently incurred, The US government also downgraded the ratings of the entire aviation operation in Mexico, effectively terminating all code-share flights for Mexican airlines. This move drastically reduced the number of passengers and the revenue flow on trans-border flights.
The airline is seeking to rewrite pilot and cabin crew contracts, slashing them by huge amounts in an effort to compete with lower cost carriers at home and abroad. The unions were not particularly amenable to such cuts so the airline is now looking to rewrite the contracts while in bankruptcy.
The move could not come at a worse time for Mexicana’s global alliance partners in oneworld. The major players in the alliance, American Airlines and British Airways just received approval of their anti-trust immunity application, a move that was expected to significantly increase revenues for the two in the transatlantic market. Losing a major partner for Latin America will definitely hurt their alliance and revenues. Considering that American was one of the only carriers in the USA to post a loss last quarter, suffering a blow like this does not engender much confidence in the near-term financial outlook.
Posted by Seth on July 16, 2008 under Uncategorized |
The American Express Membership Rewards program has been around for a long, long time, allowing the accrual of points for redemption on a variety of airlines, hotels, stores and even casino chips at one point. The participating airlines seem to vary at any given point in time depending on whether AmEx is willing to pay and whether the airline is willing to sell the points. In the past week or so AmEx has quietly added a new airline transfer partner to the US-based Membership Rewards program – the Spanish carrier Iberia. Iberia is the second Membership Rewards partner to participate in the OneWorld alliance, bringing another means of accessing redemptions within that alliance to the Membership Rewards program. That’s the good news.
American Express will transfer your points to Iberia at a ratio of 1,400:100. The reward charts are pretty granular, with flights within Spain or to the Balearics or Gibraltar only 900 points for a round-trip ticket (so only 12,600 AmEx MR points) in “Tourist Full” class, which seems to have no inventory controls. Flights are 1/3 cheaper for “Blue Class” which is limited inventory from what I can tell. Flights from Spain to the USA, Canada, Mexico, the Caribbean and Central America are only 4,750 points (or ~66,000 MR points), again in the “Tourist Full” class which seems to not be inventory restricted. They also offer one way rewards, with some fares just being 1/2 of a round trip and some (the transatlantics) having a premium attached. But these are only on Iberia-operated flights. When you start getting into partners the numbers go up pretty quickly, which is the bad news.
The redemptions are based on total miles traveled and class of service, with the breakdown looking like this:
| |
Miles Required
|
| Total miles traveled |
Coach |
Business |
First |
| 0 – 600 |
18,200 |
35,000 |
53,200 |
| 601 – 1,000 |
22,400 |
44,800 |
65,800 |
| 1,001 – 2,000 |
28,000 |
54,600 |
82,600 |
| 2,001 – 4,000 |
33,600 |
75,600 |
99,400 |
| 4,001 – 5,000 |
39,200 |
82,600 |
116,200 |
| 5,001 – 8,000 |
44,800 |
88,200 |
133,000 |
| 8,001 – 12,400 |
56,000 |
112,000 |
168,000 |
| 12,401 – 18,000 |
77,000 |
154,000 |
232,400 |
| 18,001 – 25,000 |
105,000 |
210,000 |
315,000 |
| 25,001 – 30,000 |
110,600 |
221,200 |
331,800 |
| 30,001 – 35,000 |
133,000 |
266,000 |
399,000 |
| 35,001 – 40,000 |
154,000 |
308,000 |
462,000 |
| 40,001 – 50,000 |
176,400 |
352,800 |
529,200 |
The numbers at the top of the chart aren’t terrible, but when you start getting into ‘Round The World ticket distances, particularly in the premium cabins, the numbers are pretty bad.
So if you’re looking to get around within Spain or between Spain and something nearby, this looks like a decent option. For longer flights or partner flights the numbers aren’t so great. Then again, the rates of redemption in Mexicana, the other OneWorld partner don’t seem to be all that great either (70K in coach between N. America and Europe versus 44,800-77,000 on Iberia), so this might not be so bad.
More options is always good, even if not all the redemption values are terrific.
Happy Flying!
