Mexican airline Mexicana has filed for bankruptcy protection after failing to agree a cost-cutting deal with unions, but will continue to operate as normal.


The carrier flies four times a week between Gatwick and Mexico City and offers a substantial network across Mexico, as well as to the US, Canada and Central and South America.


The airline’s financial situation was described as critical following an emergency meeting with investors on Monday, when Mexicana announced the cancellation of several daily services between Los Angeles and Mexico City saying passengers would be rebooked on other flights.


A spokesman said: “The company is analysing all options and resources.”


Two Air Canada aircraft leased to Mexicana were impounded in Canada on Sunday.


Mexicana is Mexico’s biggest airline and a member of the OneWorld alliance alongside British Airways. It carried 11 million passengers last year.


The airline has been in trouble for more than a year after losing half its revenue during the swine-flu outbreak in Mexico in spring 2009.


Proposals to cut Mexicana pilots’ pay by 40% triggered protests at the weekend, with unions appealing to the government to intervene.