Mexican Airport Operators Weigh Mexicana Impact

August 30, 2010

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Airport operators in Mexico are feeling the pinch after three troubled airlines suspended dozens of flights and uncertainty remains about whether other companies can pick up the traffic from abandoned routes.

Mexicana, one of the country's two major airlines, and regional sister carriers Click and Link, halted all operations on Saturday as unions and new owners tried one more time to find cash to keep the ailing companies flying.

Airport operator Grupo Aeroportuario del Pacifico (GAP), which generated 17 percent of its aeronautical revenue from business with the three airlines during the first half of 2010, revised its total passenger traffic growth outlook for this year to between 2.5 and 4 percent. It did not provide the previous guidance.

It also said it expected total revenue to rise up to 13.5 percent this year.

Rival Grupo Aeroportuario del Sureste said earlier on Monday it was weighing the impact that the suspension of dozens of flights from the airlines would have on its operations.

The company, known as Asur, said the three carriers accounted for 10.26 percent of its revenue during the first seven months of the year.

"Asur believes that the majority of the routes operated by (the holding company) were also operated by other carriers and thus the impact from the suspension of operations will not be in the same proportion as the number of flights cancelled," the company said in a release.

But Asur said it was unclear if other carriers would seek to pick up flight schedules from the three airlines, which landed in eight of its nine airports, including the popular beach destinations of Cancun and Cozumel.

TOURISM STILL STRONG

Asur and GAP compete with OMA for airport traffic. Mexicana represented 5.9 percent of OMA's consolidated revenue to the end of July, while Click contributed 5 percent and Link 1.6 percent, OMA said in a statement on Monday.

Mexicana owes OMA MXP3.6 million pesos and Click is indebted MXP2.8 million, OMA said. Link owes MXPOMA 1.1 million.

Authorities were working to sort out a way to fill in the flights lost from Mexicana and its sister carriers, Communications and Transport Minister Juan Molinar said at a press conference on Monday.

Tourism should remain strong despite the airport woes, with 23 million visitors expected in Mexico this year, Tourism Minister Gloria Guevara said.

But over the weekend, frustrated customers lined up at Mexicana counters across the country to reclaim their money, or try get a flight to their final destination, only to find they had to pay for new tickets with different carriers as the troubled airlines suspended all flights at midday.

Mexicana, Click and Link will take several weeks to reimburse customers for the flights they lost due to its financial troubles.

Mexicana, an 89-year-old airline, requested creditor protection earlier this month under Mexico's insolvency law, known as "concurso mercantil." It also made a bankruptcy filing in the United States but has yet to be declared bankrupt in Mexico.

Tenedora K purchased a 95 percent stake in Nuevo Grupo Aeronautico, which controls Mexicana, Click and Link. But the new owner declined to inject capital into the holding after concluding that its financial situation was too precarious, leading to the suspension of flights.

(Reuters)