The largest foreign carrier out of Los Angeles International Airport, Mexicana Airlines, has declared that high labor costs is to blame for its financial situation and filed for bankruptcy protection in both the US and Mexico.

Mexicana Airlines is the largest airline company in Mexico and made an announcement that it is suspending 31 flights across the country in a bid to help curb the outflow of money. They stated that passengers with tickets for the suspended flights could rebook with another Mexicana flight or a commercial partner. They could also have the ticket refunded.

Bankruptcy for Mexicana Airlines

While Mexicana states that their biggest issue is with labor costs, pilots and attendants, pay is up 185% over counterpart airlines in Mexico. They also say that the global financial crisis and the H1N1 swine flu epidemic that started in Mexico have made a huge hit.

The pilots and attendants have refused to sign new contracts that would reduce their pay by 40%. Mexicana was also looking to reduce the number of pilots and attendants by another 40% in the hopes that they could stem the flow of outpouring money. Pilots have stated that it’s less to do with them and more to do with inept management.