Mexico City: Mexicana, Mexico`s second biggest airline, will suspend all flights due to serious financial problems, Communications and Transport Minister Juan Molinar has said.
"Mexicana Group indefinitely suspends its operations" from midday (1700 GMT) Saturday, a company statement said.
The suspension would include flights on Mexicana, as well its low cost subsidiaries Click and Link, it said.
The group, which already partially suspended flights after seeking bankruptcy protection at the start of the month, said it had failed to reach viable, long-term financing deals.
A Mexican consortium last week said it would take over 95 percent of the group`s capital, with the remaining five percent under control of the national pilot`s union.
But the Tenedora K consortium failed to reach a deal to secure the future of Nuevo Grupo Aeronautico, the holding company controlling Mexicana and its two low cost subsidiaries.
Mexicana initially blamed its financial woes on the high cost of labour, after failing to reach a deal with unions on major cost-cutting.
The company`s fleet comprises 65 aircraft from European manufacturer Airbus and two US-made 767 from Boeing, and transports some 22,000 passengers on 220 daily flights, according to Mexicana.