The tortured attempts to revive Mexicana de Aviacion could cease at the end of June if the remaining bidders prove as feckless as the last two prospective buyers.

June 30 marks the end of Mexicana’s current bankruptcy protection, which was filed in August 2010 and has already been extended by 90 days. General sentiment among people close to the airline suggests that the person assigned to govern the bankruptcy, known in Mexico as the conciliator, will not request a second, and final, extension should the latest prospects fail to prove their ability to finance a $250 million buy out.

The most recent bid, by TG Group, collapsed last week after the consortium failed to prove it has sufficient funds, although speculation that TG started a rumor about American Airlines’ interest in supporting its buyout certainly did not help its cause (Aviation Daily, April 19).

Before TG's arrival, a separate bid by PC Capital also failed because that investment group was unable to provide sufficient evidence that it had funding. Part of the buyout must go toward a severance package for staff that is key to Mexicana’s restructuring plan.

Now that TG is gone, the opportunity to buy Mexicana lies with two other bidders, Ivan Barona and Avanza Capital, and both have already proved access to $350 million and €250 million (US$358 million), respectively, according to a source with intimate knowledge of the situation.

The two prospects are either finished with or close to finishing due diligence, depending on the source of information, and the conciliator may consider each bid as soon as next week. If one is approved, it will be passed to Mexico’s Ministry of Transportation and Communications, the Secretaria de Comunicaciones y Transportes, for its own due diligence and approval.

Four more bidders are also preparing offers, although Barona and Avanza are, for now, the most likely candidates for Mexicana.

A source confirms that if a bid is successful, the airline could access up to 15 Airbus narrowbodies immediately to resume service to key U.S. and domestic markets.

But Mexicana has been here before, and failure has plagued each attempt to revive its operation. Now the company is less than two months from complete closure and a second plan has been devised to salvage what is left of Mexico’s once-dominant carrier.

This plan essentially accepts the end of Mexicana as an airline, but recognizes that its maintenance division can support itself financially as a standalone entity. But Mexicana MRO must be spun off before June 30 to avoid exposure to debt obligations at the parent company.

Questions have also been raised about the government’s role in supporting Mexicana, and while this was true just a few weeks ago, it seems as though the government will consider the end of Mexicana despite more than $100 million in back taxes and upwards of $700 million in unpaid fuel bills. Liquidation will also expose Mexicana’s current owner, Tenedora K, to salary obligations.