It now seems that the well known Mexican airline, Mexicana, has just recently filed for bankruptcy. This now ends weeks of speculation over the future of the company. People were under the impression for quite some time that the company was in trouble, and this new move just confirms it.

This airline, which is the largest airline in the country failed to reach an agreement with unions over cost cutting measures. The airline said that it was going to cut up to 40 percent of pilots and its crew. However, Mexicana did confirm that flights would continue to operate as normal while finances are restructured.

This speculation had been mounting even more over the past few days. People were really starting to question the company’s finances after the airline chose to cut flights between Mexico and the United States.

Mexicana has been hit by a downturn in demand for traffic, which has of course caused these recent actions. However, the swine flu outbreak in Mexico last year just added to the traffic problems, which just further put this company into the red.

The company confirmed that it had filed for bankruptcy in a Mexico City court in order to restructure its costs and ensure the viability of the company. In the United States, the airline filed for Chapter 15 bankruptcy protection in New York. This was done in order to fend off legal action from creditors.

However, the court filing state aircraft leasing companies and owners are already taking steps to reposes planes. Already, three of the airline’s 64 planes have been seized. It is not yet known how many more planes will be taken from the carrier.