http://www.economist.com/blogs/americasview/2010/08/mexicanas_bankruptcy

Mexicana de Aviacion – the oldest company to exist within the national aviation industry crashed in an enormous amount of debt in 2010, problem that had been kept back by corporate officials from long before. In the verge of declaring bankruptcy, they signaled the main culprit for the decline of the company to be high wage bills, estimated to be “49% more than pilots working for the big American carriers”.

In the process of trying to keep the company alive, corporate officials proposed a new contract to enable the company to re-emerge. Not only did the salaries reduce drastically for the airline employees, but also in the last month of operations, they were coaxed into working without a salary, this being extremely unethical behavior. Thus, they gave false hope that the company would “rise again”, words that keep resonating to this day. Throughout two years, workers’ contracts were completely forgotten, stripped off health care plans and retirement options. Finally, money loaned by the government to aid the company was instead transferred into a chain of hotels owned by Gaston Azcarraga, (former owner of Mexicana), this being the biggest debt that has kept the airline from recovering.

• airline
• bankruptcy
• business
• ethics
• Mexico