The rise in Mexico's credit rating to investment grade may have come too late to save Taesa, the country's third largest airline. Grounded since mid-November and under government orders to raise more capital before it resumed flying, the carrier entered bankruptcy in late February. Its future depends on talks between the receiver and lawyers representing potential US investors.

Taesa has sought investors for years, with Continental Airlines was once mooted as a likely candidate. The lawyers involved are from El Paso, Texas, but they have not disclosed the identity or location of their clients. It is unclear why they did not come forward until after Taesa entered bankruptcy. Comments by Marco Delgado, senior partner for the Texas law firm, suggest his clients are interested in operating an airline, not in buying assets.

If Taesa is liquidated, it will have few assets. Lessors have been repossessing its leased aircraft. Vicente Rodríguez, from Mexico's federal bank protection institute, IPAB, sees no chance for Taesa to pay off its debts. Rodríguez says his agency will pay Banco Union the $120 million owed to it by Taesa because the chances for its recovery are "hopeless".

PAB holds an estimated quarter of the shares of Cintra, the holding company for Aeromexico and Mexicana, because its predecessor agency paid off banks for bad debts owned earlier by those carriers. Now IPAB may inherit an uncollectable debt from their competitor.

The possible demise of Aeromexico's and Mexicana's largest rival has rekindled debate over Cintra's control of the two larger airlines. Mexico's federal competition commission argues that the two airlines should have separate ownership. The secretary of transport and communications has resisted, fearing it would make them more vulnerable to foreign competition. It is unlikely that this impasse will be resolved before Mexico's July presidential elections.

Source: Airline Business