Mexicana's False Dawn

The plan for Mexicana to restart at least some operations has 'sputtered to a halt' as PC Capital (described as a 'tiny boutique investment firm') which was chosen by a judge-appointed mediator in November as the best option to bring Mexicana back to life, has failed to attract investors!

Whilst the Unions finally accepted the reality that there would be massive Job Cuts if the Airline was to be restarted, potential investors have been unable to raise sufficient funds, in part due to severance pay costs and Union demands on Salaries. But these form only element of the estimated $8000 Million USD Debt restructuring that would be required to relaunch (a sum which daily increases). The result Mexicana once more slips back into the Darkness of a Company in the limbo between bankrupt and liquidated. Every day that passes means that Mexicana's hopes of a relaunch lessen, if this was the last attempt to get Mexicana flying again it would be a sad end for one of the oldest and often one of the most innovative carriers in Latin America.

See: Mexicana unsuccessfully tries to relaunch from Reuters

The previous posts in the Blog on Mexicana
05th August 2010 - Will Mexicana Survive?
25th August 2010 - Bringing Mexicana Back from the Brink - Step 1
31st August 2010 - Mexicana - Two Steps back and Teetering
12 November 2010 -A Brief Update on Mexicana
13 December 2010: - Another Brief Update on Mexicana

Another Brief Update on Mexicana

As those of you who follow this blog know I have a sentimental affection for Mexicana and monitored its decline and fall with a strange mixture of emotions.

However despite ceasing operations, efforts continued to revive the carrier and now the three main unions have finally accepted reality and with some creditor support, there is every chance a much reduced Mexicana will begin operations in the New Year.

For more on this see: Unions Back Mexicana Revival an Aviation Week Article.

The previous posts in the Blog on Mexicana:
05th August 2010 - Will Mexicana Survive?
25th August 2010 - Bringing Mexicana Back from the Brink - Step 1
31st August 2010 - Mexicana - Two Steps back and Teetering
12 November 2010 -A Brief Update on Mexicana

A Brief Update on Mexicana

After I effectively 'buried Alitalia' in a series of Posts, only to be proved wrong, I have been loath to write an obituary on Mexicana. It appears this was a sensible move (I hate apologising) because there is light at the end of the tunnel for Mexico's premier Airline. Like Alitalia the plan involves a massive reduction in Routes, Fleet and Staff. Therefore a successful re-launch will depend on the Unions as much as refinancing. More on this from:
USA Today Travel 11th Nov 2010: Rescue bid: Mexicana may fly again,
Bloomberg Businessweek 10 Nov 2010: Mexicana Unions Get $155 Million Bid to Save Company
Airwise/Reuters 10 Nov 2010: Mexicana Picks Recovery Business Plan

As with Alitalia, I have a sentimental attachment to Mexicana, so I hope the Unions accept the reality of the situation and Mexicana does indeed fly again.

The Parcel Bomb Attacks - Failure, or Win?

Despite the apparent sophistication of the Devices, the attack using Parcel Bombs Carried on Aircraft has, at least so far failed, or has it?

Even though detected, due the Media frenzy Worldwide a classic climate of Fear, Uncertainty & Doubt (FUD) has been generated, this in it's self could be considered a win by those who planned/authorised the attacks. There is nothing new about Parcel Bombs and other than these were designed to explode in Flight, were a reversion to 'old school terrorism'. What has changed is the way the Media now 'spin' such stories.

When Intelligence and Security services foil a planned attack without publicity, the Terror Planners, may, or may not learn a useful lesson from the failure, but there is no getting away from the fact it was a failure.

But when as in this case, the plan fails, but does so under the spotlight of intense Media Interest (almost obsessive analysis of every aspect) then the failure can be turned in to a PR win. Actually killing people can rebound by hardening the resolve of the targeted Nation, or Culture, but not killing anyone whilst reinforcing the possibility of at anytime doing so, generates the Fear, Uncertainty and Doubt.

Also the Media demands action, leading to Politicians having to react publicly and immediately, which can in turn result in unfortunate statements being made and possibly counterproductive reactive action being ordered.

I find causalities from IEDs tragic, but the IRA were using remotely detonated roadside devices 30+ years ago, parcel/letter bombs have been used by many groups , again including the IRA, even bombs on Aircraft predate Lockerbie by decades. What has changed is the way the Media Report these events (actually report is often an incorrect term, express opinions that they may not be qualified to give, is too often the case). It is fair to say groups such as Al-Qaeda has learned that in many ways the Western Media, due to the way they react to events, useful in assisting in raising the climate of Fear, Uncertainty & Doubt.

It probably why, although individual Journalists and film units have been targeted, no attacks have been launched against News Media Studios and Headquarters.

A cynical update of the view: 'A capitalist is someone who sells you the rope with which you then hang him', could be rewritten as 'The Western News Media's way of reporting, assists in the destruction of their way of life'.

Link to an Article in Aircargo News 02nd November 2010: Bomb plot fails but terror still rules

Mexicana - Two Steps back and Teetering

In my last post on Mexicana: Bringing Mexicana Back from the Brink - Step 1
ended with: but the future looks brighter than it did when I posted Will Mexicana Survive? on the 5th August.

Unfortunately the brightness I saw was a false dawn. The Darkness began to descend again on Mexicana when Tenedora K, the new owners of the holding company Nuevo Grupo Aeronautico attempted to lay off 1,366 Cabin Staff at below normal severance pay and then rehire some on new contracts. This was, perhaps unsurprisingly blocked by the Government.

Whilst this was a blow to the restructuring plan, it appears the fundamental problem was when the fast tracked 'Due Diligence' revealed exactly how bad the financial situation really was. This resulted in Tenedora K backing away from any new investment.

Result was inevitable, Mexicana began an orderly shutdown of operations starting on Friday the 27th August and completely ceased operations by midday Saturday the 28th August. This shutdown also included the two budget Carriers owned by Nuevo Grupo Aeronautico, Click and Link, but these are expected to return to operation. But where does this leave Mexicana?

Well in normal circumstances this would be the end of the line for the Company. But this isn't just another Airline; it is Mexico's National Carrier and a major employer and so frantic efforts will continue to resuscitate it.

Whilst objectively it is time to perhaps build a new National Carrier without the baggage of Mexicana's past, part of me hopes they do find a way of reviving Mexicana and returning it to when it was staffed by people determined to make it work as a company, not as a company to be milked by its workers.

Previous Posts on Mexicana:
Bringing Mexicana Back from the Brink - Step 1 25th August 2010
Will Mexicana Survive? - 05th August 2010

Bringing Mexicana Back from the Brink - Step 1

A Mexican Consortium has stepped to take a controlling interest in Mexicana. The consortium named Tenedora K has been formed specifically to buy a 95% Shareholding in Nuevo Grupo Aeronautico which is the holding company for Mexicana and its domestic operations offshoots Mexicana Click and Mexicana Link. The remaining 5% of the shares remains with the Pilots Union, who through their leader Fernando Perfecto, have been involved in attempts to find a buyer.

However before the deal can be finalised it still has to go through the due diligence processes and the urgently required Capital Injection is subject to investment conditions being favourable. However there has already been one casualty as Manuel Borja Mexicana's now former CEO left his post on the 20th August. Meanwhile the legal proceedings on the Mexicana Insolvency continue through the Mexican Courts.

The formation of the Tenedora K consortium has been carried out with impressive speed, with the assistance of Advent International, and assuming that the result of fast tracking 'Due diligence' falls within what is acceptable to the Consortium, then the completing the first step in saving Mexicana will depend on the Consortium making a massive Capital injection.

But completing this first step just provides a 'life support system' and the very real challenge for the new owners is the total restructuring of the Airline. This restructuring is going to have to be at all levels of the Business and I am sorry to say will have a major impact not just on staffing levels, but pay, benefits and conditions for those still employed. This will bring the new team into the same conflicts with the Unions (including the 5% Shareholding Pilots Union) as the previous Management. But whilst the Labour situation will headline, all other elements of the Business including Fleet and Route Structure, plus Ground Handling services and Back office functions including IT will need to be reviewed and where necessary pruned.

Mexicana's survival will require hard decisions, with a heavy human cost and it will be a painful journey, but the future looks brighter than it did when I posted Will Mexicana Survive? on the 5th August.

See Update: Mexicana - Two Steps back and Teetering 31st August 2010

Will Mexicana Survive?

The Airline Industry is a really tough competitive environment with no room for sentiment. But I have been watching with considerable sadness the rapid and accelerating decline of Mexicana. The 89 year old Airline has been in serious financial straits for a long while and to turn this into a potentially fatal crisis needed a trigger to be pulled and on the 29th July it was: Canada cancels 2 flights on creditor request. This was followed by a further seizing of an Aircraft in Chicago by the leasing company AerCap.

The Company has been struggling with the Unions to persuade them to accept further Job and Benefit cuts. This is a major issue for the Airline as if labour costs are removed, and then Mexicana has a 30% advantage over similar US Operators. But put the labour costs back in and suddenly that advantage not only disappears, but immediately puts Mexicana at a disadvantage. For example: Mexicana Pilots earn 49% more that their US Equivalents, but more telling is their 185% salary advantage over Pilots for other Mexican Airlines such as Volaris or Interjet. For Cabin Staff the situation is similar with salaries 32% above US Equivalents and a 165% above the Mexican Airlines mentioned earlier. Despite this the Unions having already seen a major cut in Benefits back in 2006 are resisting any further changes.

On 3rd August the Airline announced its latest Restructuring Plan a major part of which would be the cutting of Aircrew Salaries: For Pilots 41% cut in Combined Salary and Benefits, or Cabin Staff 39%, but in addition major redundancies of the order of 40% in both categories. As an alternative the Company offered to sell the Airline and its massive Debt to the Unions for 1 Peso!

The Unions reacted swiftly by rejecting both options (A Shorter article here: Mexicana Workers, Management at Impasse).

The Airline began cancelling services on a relatively wide scale with a statement on its website reporting that Mexicana "financially non-viable" and this was reported by ABTN amongst others.

On the 2nd August the Airline filed for Bankruptcy Protection in both Mexico and the USA and on the 4th further announced it had suspended Ticket Sales and to add insult to injury the FAA announced it was downgrading Mexico's Air Safety rating from 1 to 2, nothing to do with Mexicana Woes, but not something to inspire confidence.

The Pilot's Union responded to the Bankruptcy Filing by a demand that the Airline open its books for inspection. Already the impact of the situation is being felt as Mexico's Airports begin to calculate the implications.

Mexicana is part of the OneWorld Airline Alliance and the 5th August, the OneWorld Cockpit Crew Coalition (made up of Flightdeck Crew from all the member airlines) issued a Press Release Voicing Support for Mexicana Pilots.

Meanwgile three Leasing Companies are attempting to recover their Aircraft via a US Court: Creditors Seek to Get Their Planes Back from Mexicana. In the view of AerCap (who aren't involved in the Court Case) there is a ready demand for Mexicana Aircraft

So can Mexicana find a way out this, well I was wrong about Alitalia whose situation back in 2008 had many similarities and although still making losses showing signs of recovery , however going further back in the past, Sabena was in destroyed by Union intransigence and very high costs and in part by the failure of the Swissair Investment. My head tells me that Mexicana it on the point of becoming History, but in my heart I hope it not only makes its 90th year, is still in business for its centenary!

In this Blog see:
A (belated) Happy Birthday Alitalia which has links back to my 'doom and gloom' posts.

External:
What Goes Up Must come down - Economist 5th August

Railways, Roads and Runways - Politics overriding National Interest

Over the Weekend I spent some time reading the Institution of Civil Engineers Report: Rethinking Aviation. This once again reminded me how pathetic British Transport Planning has been for the last 45 Years due to Party Political Interests being considered overwhelming important and the National Interest usually not only being an incredibly poor second, but often a even poorer third if a Cabinet Minister's constituency, or an important marginal is under threat. Couple this with Treasury and most other elements of the Senior Civil Service's distaste for spending money on infra-structure (bearing in mind where most of the Senior Civil Servants live, it is amazing any Infra-structure Projects, Major, or minor are ever progressed in the NIMBY dwelling Home Counties) and perhaps the current situation was inevitable.

My views on this subject have (at least in part) been covered in earlier posts notably: Politics of (Rail) Transport (October 2008) and High Speed Trains and Heathrows Third Runway (February 2010) and even in my Aviation History PDF Article on The Airlinks between Gatwick and Heathrow (Published back in August 2006 in the section: Current Situation and the Future - page 9).

My Post of October 2008 ended with the following:

Transport is too important nationally to be a political football. We have wasted at least 40 years, please, don't waste the next 40!

Well we are now over halfway through 2010 and I see no evidence that anything has changed for the better, just another change of Government pandering to populist politics! In my post of February 2010 I used the above Quote as my Highlight opening and then continued with:

In France where there appears a separation between National Interest and Party Politics so lacking in Britain, there has been a consistent integrated National Transport Policy, especially in regard to High Speed Rail for 40 Years. So the recent British political consensus on the need for High Speed Rail links and this cross-political support for some major projects has been a welcome 'chink of light'.

Unfortunately that Chink of Light was just the Head Lamp of onrushing Party Politics. So one of the first acts of the Coalition Government was to stop the third runway at Heathrow, Oh Good the National Interest loses again to doing what is popular rather than right! But then they are only continuing a tradition that stretches back to the mid-1950s and has continued regardless of the Party in Power.

In simple terms France (and Germany) make Strategic Plans that are then rolled out over decades, being updated as technology and national requirements change, but the basic plan survives all the changes in Government and proceeds on the basis of National, than Political Interests. In Britain, all plans however well structured and designed to meet long term national needs are not implemented as a structured package of complementary projects, at best they are cherry picked for short term political advantage and then argued over for years. Even if a small part of one plan finally makes it to being implemented, it sits in splendid isolation, locally of benefit but usually totally irrelevant to the overall National Requirement.

Railways, Roads and Runways are vital elements of National Infra-structure and the National Economy (to which you can add Ports, Shipping and thinking 'Green' the Inland Waterways) and should cover all regions of the UK in a unified long term plan. Almost every European Country thinks in these terms and those like France and Germany who have kept to their strategic plans have benefited whilst in Britain even the phrase 'Transport Policy' is an oxymoron as it is just one element in the Political Playground which has more in common with a primary school playground than mature considered policy making for the United Kingdom.

United Airlines Did Him Wrong so a wrote a trilogy of Songs

When United Airlines Loading Staff broke singer/songwriter Dave Carroll's $3,500 Taylor Guitar by throwing it about (along with the bands other instruments) and then wouldn't pay compensation. Well in his final email to them, he advised he was going to write and produce three songs which then form the Music to three Videos which would then be posted online. The third song was released on the 2nd March:

United Breaks Guitars Song 3 - "United We Stand" on the Right Side of Right

To see all three videos in one place go to: United Airlines did him wrong, so he wrote a song (or three)!, Originally posted in July 2009 with the first Video, updated with the second video and now the final one in the trilogy!

A (belated) Happy Birthday Alitalia

On the 13th January the new Alitalia celebrated one year of Operations.
Back in the summer and autumn of 2008 continuing into January 2009 I posted some blog entries which cast considerable doubt that Alitalia would have a future.

Well I was (I am pleased to say) wrong! The phoenix like new Alitalia despite a very rocky few days when re-launched has made great strides towards becoming a profitable enterprise. To reach this point there must have been a painful Journey, not just the massive job losses but the clash of cultures when Air One was merged with the remainder of the old Alitalia, However all credit to the Managers and Staff for somehow making it work.

My 'doom and gloom' laden posts can be found here:
2008:
alitalia - how long before the life support is switched off? 29 Jul 2008
alitalia - have the unions killed the only hope? 13 Sep 2008

alitalia files for bankruptcy protection 29 Aug 2008

alitalia - is the opera entering its final act? 06 OCt 2008
2009
alitalia reborn - but will it survive? 13 Jan 2009
alitalia - unions spoil first day 14 Jan 2009
strike one for alitalia 19 Jan 2009

Avro Vulcan XH558 50th Birthday Appeal

2010 marks the 50th Birthday of Avro Vulcan XH558 - Built in 1960 and today the last of her kind flying anywhere in the World. Keeping such a large, complex unique Aircraft flying safely costs a lot of money and as this is a British Conservation Project funds are always on a knife edge. At this time of year with no revenue from Display Appearances and Annual Maintenance a priority, just paying the Engineers who are the key to the project is a  is a major concern, but other bills also rise during the winter, so any donation however small is welcome:

As a reminder of the awesome Vulcan see these videos:

United Airlines did him wrong, so he wrote a song and now a second one

When United Airlines Loading Staff broke singer/songwriter Dave Carroll's $3,500 Taylor Guitar by throwing it about (along with the bands other instruments) and then wouldn't pay compensation. Well in his final email to them, he advised he was going to write and produce three songs which then form the Music to three Videos which would then be posted online. See the Post: United Airlines did him wrong, so he wrote a song (or three)! Which has both Videos released so far and slightly more detailed background and links.

For those who have followed the saga and want to see the second Video NOW, well here it is:
United Breaks Guitars Song 2:

For more information on the making of United Breaks Guitars: Song 2 on Dave Carroll's Site.

Enjoy!

Update 27th August 2009: I have just seen this article on ZDNet (USA) which gives United yet another PR Headache:
Deconstructing United Airlines: Where Customers are Transactions

United Airlines did him wrong, so he wrote a song (or three)!

Post Updated on the 3rd March 2010 to cover the entire trilogy of Songa/Videos:

When United Airlines Loading Staff broke singer/songwriter Dave Carroll's $3,500 Taylor Guitar by throwing it about (along with the bands other instruments), he started what should have been a simple compensation claim, which ended NINE MONTHS later with United Airlines final refusal to pay compensation, So in his very last email to United Airlines he said he would write and produce three songs about his experience with United Airlines and make videos for each to be viewed online by anyone in the world.

This is the first of these videos - United Breaks Guitars :

The sorry tale in both short and long forms is here: United Breaks Guitars
There is also a video statement from Dave Carroll

Here is the Second Video: United Breaks Guitars Song 2:

For more information on the making of United Breaks Guitars: Song 2 on Dave Carroll's Site.

The third and final Song/Video was released on the 2nd March 2010 and here it is:

United Breaks Guitars Song 3 - "United We Stand" on the Right Side of Right

The 1939 London-Cape Town Records have been finally Broken

When Alex Henshaw set the record back in 1939 in in a single engined and especially modified Percival Mew Gull Racing Aircraft G AEXF: He flew London - Cape Town - London round trip in Four days, 10 hours and 16 minutes.

No one then could have predicted it would be 70 years before that record would be broken.

Today the 11th May 2009 Charles 'Chalkie' Stobbart completed the same trip in a Home-build Osprey GP4 aircraft in Three Days 15 Hours and 17 Minutes
See the Henshaw Challenge Web Site

A tremendous achievement, but one the Mainstream Media in the UK has ignored, instead considering the breakup of a reality show couple more important.

Whilst Alex Henshaw flew from Gravesend Airport to Cape Town and then back to Gravesend, Chalkie Stobbart departed Cape Town and arrived at Southend and then Back to Cape Town.

Obviously Chalkie benefited from the technical advances in Navigation Technology, but this should take nothing away from a shining example of human endeavour and endurance.

To Chalkie Stobbart:
Well done sir!

40th Anniversary of Concorde's First Flight:

Today the 2nd March 2009 is the 40th Anniversary of Concorde's First Flight on the 2nd March 1968 and the Fleet was withdrawn from service 34 Years later on the 24th October 2003.

The following YouTube movie (one of the many of Concorde) makes a fitting tribute to this great aircraft:

Concorde: First Flight

Mobile Phones on Aircraft: Ryanair Rollout Voice/SMS/Email Services

The news that budget airline Ryanair has started to rollout an in-flight mobile phone voice service should come as no surprise, after all back in 2006 the company announced it would be introducing the service 'soon' . Ryanair is constantly looking at ways to generate additional in-flight revenue and has worked extremely hard to fully understand the services that will sell to its passenger demographic.

It obviously views an early adoption of in-flight voice mobile service as potentially a very profitable revenue stream (early pricing being: £1.50-£3 per minute, text messages at 40p a go and e-mails from £1-£2) and as a bonus using the wide spread reporting of the new service as free advertising.

For the initial phase 20 Aircraft have been equipped for the service, with the remainder of the fleet being refitted over the next 18 Months. The service provider is OnAir and for the ground segment , they have arrangements with 50 mobile phone operators throughout Europe to route call once it leaves the OnAir Network. Currently only one UK Network is signed up, this being O2, but talks with the rest of the major UK Networks are in progress.

Those of you who have followed by previous posts on this subject know that whilst I find the technology fascinating, I am more than a little concerned over the adverse impact on passengers who use the flight part of their journey as 'quiet time' whether for reviewing work, or just relaxing.

Well the introduction of the service is likely to make Ryanair flights louder and more boisterous.
However, Michael O'Leary, the company's chief executive, has little sympathy for passengers trying to catch up on sleep or hoping for a little peace and quiet on their trip:

"I have no patience with the approach that says people don't want to use their mobile phones in-flight," he told The Guardian. "You don't take a flight to contemplate your life in silence. Our services are not cathedral-like sanctuaries. Anyone who looks like sleeping, we wake them up to sell them things."

"We will be encouraging our passengers to make as many calls as possible because that will lower our costs and boost our revenues."

Which really sums up the Ryanair philosophy. With the current economic situation companies are going to further increase the use of Budget Airlines for Business Travel, as most of Ryanair Flights are short haul, Business travellers used to traditional airline service may become irritated, but no more. However for routes that are deemed Medium Haul, being sat next to a 'Mobileholic' could lead to the first instance of Anti-Mobile Rage on an Aircraft - We shall see!

Meanwhile the Idle Man will follow the Ryanair rollout with interest.

Previous Posts on this Subject:

Mobile Phones on Aircraft - Like the Technology - Hate the Consequences 22nd October 2007

Mobile Phones On Aircraft - Update 8th November 2007

Mobile Phones On Aircraft - US Congress to vote on in-flight mobile ban 01st August 2008 (This never went to a full vote and therefore the proposed law was abandoned)

External Links:
Guardian - Ryanair starts in-flight mobile phone service

Telegraph - Ryanair launches mobile phone service

BBC - Ryanair allows mobile phone use

Moving the US Air 'Hudson River' A320 to a Hangar

This picture series of 11 Photographs forms a follow-up to the post on the 26th January 2009:
Recovery of US Air Airbus A320 from the Hudson River

This post covers the transport of the Aircraft Fuselage through the streets of Red Hook New York State during its transfer to a Hangar for detailed examination:






















Copyright Unknown.

Save Our Vulcan

Save Our Vulcan Donate By Clicking this Link

Recovery of US Air Airbus A320 from the Hudson River

The recovery operation was carried out on the 17th/18th January 2009:








































Copyright Unknown


A reminder how the Crash Landing was reported on the 16th January 2009

There is now a follow-up post covering the Transport of the Fuselage through the streets of Red Hook New York:
Moving the US Air 'Hudson River' A320 to a Hangar

Strike One For Alitalia

The Reborn Alitalia is 7 Days Old and today (20th January) already has had its first strike (as against the mere disruption caused on its first day).
Admittedly this lasted a mere 4 Hours and is more a 'flexing of the muscles' by the union involved, SDL rather than a full scale clash.

This mini-strike still resulted in 22 Flights being cancelled including 6 International services!

So what was this strike over?
According to the SDL Union:
The protest was over new labour contracts and the criteria used to hire employees as part of Alitalia's relaunch.

Surely this was all resolved in the incredibly protracted negotiations between CAI Investor Group, the Unions and the Italian Government prior to the relaunch?

Actually I don't think the answer matters, just the conclusion and that is nothing has changed (so far), and the New Alitalia is the same as the Inefficient, Unsustainable, Old Alitalia.

Previous Posts on Alitalia in this Blog:
14 January 2009: Alitalia - Unions spoil first Day
13 January 2009: Alitalia Reborn - But will it Survive?
Last Year:
06th October 2008:
Alitalia - Is the Opera entering its final act?

13th September 2008:
Alitalia - Have the Unions Killed the only hope?

29th August 2008:
Alitalia Files for Bankruptcy Protection

29th July 2008:
Alitalia - How long before the life support is switched off?