Mexicana Sketches Out $2 Billion Fleet Renovation

Mexicana de Aviacion, Mexico’s number-two airline, plans to pony up $2 billion over the next three years to increase its fleet, a spokesman said earlier this week.

The plan to add more planes is conditioned on the results of a campaign by Mexicana, with 28 percent market share in Mexico, to cut one-quarter of its costs, airline spokesman Adolfo Crespo said.

“We are already negotiating with two airplane manufacturers, Boeing and Airbus , to introduce 40 additional planes to the fleet,” Mr. Crespo said.

The airline, acquired in 2005 by hotel operator Posadas, expects to achieve cost-cutting objectives in the first quarter of this year, Mr. Crespo added.

Earlier this week, Mexicana signed a deal with ground workers that should save $20 million a year. In November, the airline said it reached an agreement with pilots that would save $50 million annually.

Mexicana lost money in 2006, partly because of the entry of low-cost airlines in Mexico’s market, forcing it to cut fares. Higher fuel prices and labor costs also hurt the airline last year.