FAA restores Mexico’s safety category; new hope for Mexicana

After several weeks of hard work and an outstanding effort from the Mexican
aeronautical authorities and industry stakeholders, the US Federal Aviation
Administration (FAA) has decided to restore Mexico’s top safety category earlier that
expected.

In June 2010 the FAA downgraded Mexico from Category 1 to Category 2 on the basis of
certain organisational and administrative issues facing the General Directorate of Civil
Aeronautics (DGAC). Although the authorities insisted that the FAA’s judgment did not
indicate a deterioration in the standards of Mexico’s civil aviation, for many
commentators it underlined the need to ensure adequate resources for inspection,
verification and training procedures (for further details please see
“Mexicana and FAA audits push industry closer to crisis”).
According to the FAA, recent reviews of the DGAC have confirmed that Mexico has made
significant progress. Mexico and the United States will continue to provide technical
assistance to support and maintain the status quo. As a result, all Mexican carriers can
resume their plans for establishing new services to the United States or code sharing
with their strategic partners.

It is now the turn of the airline Mexicana to recover the position that it held in the industry
for many years. With a new group of investors (PC Capital) leading the airline’s
restructuring process, Mexicana recently reached a successful arrangement with
representatives of the trade unions representing pilots, crew and ground personnel,
thereby securing new labour conditions that provide the airline with a basis for returning
to financial viability. The debt restructuring in which the airline is immersed must still be
resolved; its creditors’ support in this respect is essential. Mexicana intends to resume
operations by mid-January 2011 with a smaller fleet and a reduced number of
employees.

For further information on this topic please contact Jose Antonio Perez Estrada at
Cornejo Mendez Gonzalez y Duarte SC by telephone (+52 55 5540 4450), fax (+52 55
5540 4430) or email ([email protected])