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Mexicana Airlines Signs Historic Agreement With SNTTTASS

January 19, 2007
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MEXICO CITY, Jan. 18 /PRNewswire/ — Mexicana Airlines today entered into an historic agreement with the National Union of Transport, Manufacturing, Aviation, Service and Similar Workers (SNTTTASS). The agreement provides for more flexible labor conditions for ground workers — conditions which had not been modified for more than 15 years — and is expected to translate into annual savings of 20 million dollars for the company, giving continuity to the productivity agreements signed in 2006.

This heralds a new era in labor relations between companies and unions in Mexico and is tangible evidence of Mexicana’s drive to modernize its operations and remain at the vanguard of the commercial aviation sector.

The terms of the agreement will give stability to Mexicana’s relations with SNTTTASS right through until the year 2009. In support of the airline’s efforts to strengthen its finances, ground workers accepted a “zero” salary increase for 2006, and inflation-indexed raises plus one percentage point for 2007, 2008 and 2009.

The agreement also provides for:

Polyvalence: The incorporation of the concept of polyvalence means one single staff member can perform several functions. Mexicana’s passengers will now be able to check in, purchase plane tickets and pay excess luggage charges at one single counter, as opposed to having to stand in line at several, with the ensuing improvement in customer services and reduction in costs.

Shorter working days: By adapting the length of the working day to the demands of its operations and flight itineraries, the airline aims to optimize resources, while contributing to the growth of the company and creating more jobs nationwide.

Productivity incentive: The introduction of a productivity incentive system marks a radical turnaround in the sales and reservations area, whose employees will now be rewarded for their efforts to boost sales in proportion to the amount of income they generate for the company.

Maintenance, Repair and Overhaul (MRO): At its engineering and maintenance areas, Mexicana has strengthened its commitment to passenger safety without sacrificing the quality of its services. More flexible working days means that more man-hours are available when required, while new agreements for the training of mechanics have been entered into.

Having more mechanics on hand at its engineering and maintenance areas at times when services are in greater demand will afford Mexicana the opportunity to put its new MRO business unit into operation. MRO was set up with a view to maximizing the company’s resources, improving its service standards and optimizing the use of its existing infrastructure. Mexicana boasts the best maintenance base in Latin America and hopes to render MRO services to other airlines under more competitive conditions in the near future. These services will be extended to the Guadalajara maintenance base in mid-2008.

Under an agreement signed in September 2006, the workforce in this area was streamlined by 10% and there was a 30% increase in productivity at certain stations.

Marking the culmination of several months of negotiations, Mexicana CEO Emilio Romano and SNTTTASS Secretary General Miguel Angel Yudico signed the agreement today at the offices of the Labor Ministry in the presence of Labor Secretary Javier Lozano Alarcon, the Chairman of the Board of Grupo Mexicana Gaston Azcarraga, and Juan Ortega Arenas, Legal Advisor of SNTTTASS.

“This agreement was achieved through dialog and the trust shared by both parties, whose overriding objective was to find the best way of making the company viable in the long term,” said Emilio Romano, who added that: “There is no better example of quality of life than the knowledge that you have a stable job to go to and this agreement makes this possible; we should acknowledge the fact that the step we are taking today is a fine example of how a mature vision of the labor relationship can give collective contracts the flexibility required to adapt to the needs of companies, thereby allowing them to compete in a profitable manner.”

Miguel Angel Yudico said that, “By virtue of this agreement, the union is helping build on the company’s future by taking into account today’s difficult market conditions that demand greater competitiveness of the airline. Likewise, the union is standing by its commitment to ground workers by acknowledging that the best way to protect their collective contract is by ensuring they have the necessary flexibility and productivity to guarantee them a secure and stable source of employment in the long term.”

Emilio Romano thanked the union leaders and the company’s workers before going on to comment that the agreement signed today is of great transcendence in that it constitutes a commitment and yet another leap forward in the drive to boost Mexicana’s competitiveness and guarantee the airline’s long-term viability.

This agreement, just like the one signed with ASPA, is a progressive document that reflects Mexicana’s commitment to offering its clients top quality services at more accessible prices and in more efficient ways.

Negotiations are currently being held with flight attendants and their union leaders (ASSA), and Mexicana is confident that an agreement will be reached soon, enabling the company to conclude the process of consolidating its future.

Contact:

theresa.bravo@mexicana.com.mx

Mexicana Airlines

CONTACT: Theresa Bravo of Mexicana Airlines, +1-310-863-4288,theresa.bravo@mexicana.com.mx