Mexicana Airlines Files for Bankruptcy Protection in USA and Mexico

Mexicana Airlines, the busiest foreign carrier at Los Angeles International Airport, announced Tuesday that it had filed for bankruptcy protection in the U.S. and Mexico, blaming much of its financial trouble on high labor costs.

The debt-ridden airline made the announcement one day after suspending a total of 31 flights in Mexico and across the U.S., including some of its departures from Los Angeles, New York, Chicago, San Jose, Sacramento, San Francisco and Oakland, Los Angeles Time informs.

Mexicana, a unit of Nuevo Grupo Aeronautico, also said sister airlines--MexicanaClick and MexicanaLink--won't be affected as the airlines are independent of Mexicana, and therefore independent to the proceedings.

Under Mexican law, once the insolvency filing has been accepted, the judge will order the company to continue operating to ensure services are not interrupted and that consumers are not adversely affected, Wall Street Journal reports.

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