Mexicana files for bankruptcy

Mexico's biggest airline, Mexicana de Aviacion, has filed for bankruptcy protection after failing to reach a deal with trade unions on cost cutting. The heavily-indebted airline said flights would continue while it restructured its finances.

The firm suffered heavy losses during Mexico's recession in 2009, as well an outbreak of swine flu the same year which badly affected the Mexican economy.

Mexicana said it had filed for bankruptcy in a Mexico City court "to restructure its costs and ensure the viability of the company".

It has also filed for Chapter 15 bankruptcy protection in New York to fend off legal action from creditors.

The 89-year-old airline has debts of about $800m (£500m).