Around 18 months after it suspended operations it appears that Mexicana could return to the skies from the second quarter of this year after the latest rescue package for the carrier received the backing of a bankruptcy judge. This is the latest of a number of attempts to reform the carrier over the past year and a half but all have previously failed to provide the financial guarantees to get Mexicana back in the air.

This latest proposal is from a private company called Med Atlantica, led by Spanish businessman Christian Cadenas, which aims to invest $300 million in the airline's operations and take on a number of the airline’s former workforce. Under the rescue deal, the ‘new’ Mexicana could be flying again as soon as April 2012 but in a much more streamlined form that previously. The initial plan is to inaugurate flights with just seven aircraft but there are ambitious plans to grow to 44 aircraft within the first year of operations.

“The new owners have decided to invest another $300 million in hotel projects and $50 [million] more for contingencies, which amounts to $650 million,” Miguel Angel, Chief of the SNTTASS Transportation Workers Union told local newspapers. “The next step will be to sign an agreement with its creditors and for this country’s aviation authorities to provide Mexicana de Aviacion with authorisation to fly, which is expected to happen in the next few weeks.”

When Mexicana suspended operations in August 2010 and filed for bankruptcy protection to restructure a debt of more than $800 million it was the second largest carrier in the domestic Mexican market and the largest international carrier from the country. As the table below shows using data from the month before its collapse, Mexicana accounted for just under half of the weekly capacity in the domestic market offering over 215,000 weekly seats, a 30.1 per cent share of the available capacity.

In the subsequent 18 months the domestic market has reduced by 17.3 per cent in terms of weekly flights and 10.0 per cent in terms of weekly capacity as the total number of domestic flights each week has fallen from 7,840 to 6,483 and the available capacity from 715,025 seats to 643,281 seats. Aeromexico, which was the largest carrier in the domestic market has reinforced its position with its market share of capacity up 9.0 per cent in the interim period, but it is Volaris that has witnessed the most notable benefit from Mexicana’s closure with its market share doubling from 14.0 per cent to 28.0 per cent in the past 18 months.

There remain just five domestic routes previously operated by Mexicana ahead of its closure that no longer see regular scheduled service, the most notable being Guadalajara – Puebla Atlixco, which was operated up to three times daily using a Bombardier CRJ200. The other routes no longer served by local carriers comprise Guadalajara – Acapulco which was flown daily with a CRJ200; Mexicali – Culiacan, which was flown daily with a Boeing 717-200; and flights from León to Morelia and Zacatecas which were operated twice and once weekly respectively using Airbus A319s.

Looking at the international market, airlines have been much quicker to fill the void following Mexicana’s closure with the number of international flights from Mexico actually up on the figure from 18 months ago. In the 18 month period the international market has increased by 6.2 per cent in terms of weekly flights and 9.7 per cent in terms of weekly capacity as the total number of international flights each week has grown from 2,494 to 2,649 and the available capacity from 316,796 seats to 347,419 seats.

As the table below shows, Mexicana was the dominant carrier in the international market from Mexico with a 21.4 per cent share of the available capacity offering over 500 weekly flights and 67,000 seats from the Central American country. Interestingly, although Alaska Airlines, Delta Air Lines, United Airlines and Volaris have seen greater than one per cent rises in market share since Mexicana’s closure it is the smaller operators that seemed to have gained most from its closure with the airline’s outside the top ten (by weekly seat capacity) seeing their share of market increase from 17.6 per cent to 28.1 per cent.

In the international market a number of former Mexicana markets remain unserved including its Mexico City – London Gatwick route, albeit British Airways does offer flights to the Mexican capital from London Heathrow. Other routes previously served by Mexicana which no longer see scheduled air links include flights to Chicago O’Hare from Morelia, Monterrey and Zacatecas; services to San Jose from León and Morelia and on the Cancún – San José, Costa Rica, Mexico City – Calgary, Monterrey – New York JFK, San Jose Del Cabo – Sacramento and Zacatecas - Oakland International routes. These were all served on an up to daily basis with some routes only seeing two rotations per week.

Once Med Atlantica signs a formal agreement with Mexicana’s creditors the carrier is expected to receive its Air Operators Certificate (AOC) and it will then begin the process to try and recover its airport slots in the domestic and international markets which in its absence have been subsequently awarded to other airlines.