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by Michael J. Shapiro | August 11, 2010

Mexican airline Mexicana de Aviación filed for an insolvency process similar to bankruptcy on Monday, Aug. 2, and announced the move publically last Thursday. Despite initial assurances that most flights would not be affected, the company announced Sunday a more significant reduction in its flight schedule due to its financial situation having “deteriorated substantially” over the last several days. A number of factors “have strangled the cash flows the airline needs to finance its day-to-day operations,” the airline noted in a statement. One such factor was a decision by the International Air Transport Association to suspend a key sales channel, causing the airline to suspend indefinitely the sale and issuing of tickets. The airline is now canceling some flights and attempting to give priority to homebound passengers. Flight updates are being posted on mexicana.com.