Mesaba Chapter 11

[George Tower]

Hi there

Can anyone shed any light on what is happening at Mesaba. I presume they are still in Chapter 11???? Has the fate of the Avro fleet been determined yet. Last I heard they were being withdrawn. Does anyone have any details on this.

Rgds

GT

[weasil]

Last I heard they were down to around 20 Avros and still had their 49 Saabs. Here's a couple of recent articles which have more information.

Weasil
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BY JEWEL GOPWANI

FREE PRESS BUSINESS WRITER




Posters supporting Mesaba Airlines line the walls as employees and family members of Mesaba workers watch a Webcast rally Wednesday. (RASHAUN RUCKER/Detroit Free Press)
Flying Northwest Airlines today?

If so, there's a pretty good chance you're flying one of the airline's two regional carriers.

Many travelers don't see a difference. Passengers who end up flying on planes operated by Mesaba Airlines or Pinnacle Airlines book on www.nwa.com and board red-tailed planes from Northwest's terminal at Detroit Metro Airport.

But these companies -- which handle 44% of Northwest's daily flights at the airport and employ more than 2,000 workers -- are the lead characters in a story that's unfolding in the shadow of Northwest's high-profile bankruptcy case.

At Mesaba, the company wants to slash labor costs in bankruptcy court. Union workers have vowed to stop proposed cuts and have threatened to strike -- a move that could force the liquidation of the commuter, which operates nearly a fifth of Northwest's flights out of Detroit Metro.

Meanwhile, Northwest's other feeder carrier, Pinnacle, is trying to keep Northwest as its only customer.

Both stand to lose significant business from Eagan, Minn.-based Northwest, which has plans to start its own commuter airline.

Seeking concessions

Mesaba's troubles mirror many of the issues at Northwest.

Entrenched in its own Chapter 11 bankruptcy case in Minneapolis, Mesaba is trying to pull concessions from its union workers. It's asking a bankruptcy judge for authority to impose lower wages, higher benefit costs and new work rules on 1,600 unionized pilots, flight attendants and mechanics.

Mesaba says it needs to shrink from the 100 planes it flew last October to 49 by the end of the year, based on expectations Northwest has made for Mesaba. It currently operates 74 planes.

The airline wants workers -- from management levels to union ranks -- to take 19.4% cuts in their benefits and wages. That would trim $17.1 million a year from its labor costs including $10 million from its union workers.

Mesaba employs 3,800 people, including 1,412 in Michigan. It's a subsidiary of MAIR Holdings, which has not filed for bankruptcy protection.

Mesaba says it needs the cuts, not only to handle cuts in its fleet, but to lower its costs enough to maintain and potentially win new business from Northwest, Mesaba President John Spanjers said in court papers last month.

Last year, Mesaba carried 5.7 million passengers for Northwest. As for revenue, Mesaba brought in $441 million during the 12 months ending in March last year.

Mesaba workers say they don't believe that the company needs all of the cuts it seeks.

The proposed cuts would reduce the average annual salary for a Mesaba flight attendant from $20,000 to $16,800. It would send the average salary for a pilot to about $37,000 and the top salary for a mechanic would go down to $38,000 a year.

Salaries would drop further when considering higher health care costs. Pilots would see larger pay cuts after trickling down to lower-paid posts.

Workers say they're concerned that they'll be giving up more than they have to, while driving themselves into their own financial turmoil.

"Most of our flight attendants have to take two jobs to make ends meet," said Nick Birchfield, president of Mesaba's Detroit unit of the Association of Flight Attendants, to more than 70 workers at a union rally Wednesday at Detroit Metro Airport.

All sides say they want to broker a deal instead of forcing a judge to make a decision. This week, the airline asked for an extra month to negotiate, before the judge is slated to make a decision.

Regional competition

Mesaba and Pinnacle are part of a highly competitive regional airline industry in which commuters try to keep costs low to woo major business carriers.

"There's a lot of pressure to reduce costs," said George Hamlin, a Fairfax, Va.-based transportation consultant. The pressure worsened for Pinnacle late last year when Northwest put the flying it gives to Pinnacle up for bid. Pinnacle employs 752 workers at Detroit Metro and operates about 140 flights a day there. Last year, Pinnacle carried 8.1 million passengers, resulting in $833 million in revenue from its airline operation. That work could change hands if Northwest chooses another carrier to operate Pinnacle's flights. That's one reason workers at Pinnacle are closely watching what's happening at Mesaba, said Wakefield Gordon, who leads the Air Line Pilots Association's Pinnacle unit.

Gordon told Mesaba workers this week: "We know that if you don't win this battle, they're coming after us next."

[weasil]

Mesaba, unions gain more time to bargain

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Liz Fedor, Star Tribune Last update: March 14, 2006 – 8:23 PM

Mesaba Airlines extended a peace offering to its unions Tuesday, and the two sides left U.S. Bankruptcy Court with an extra month's time to negotiate new contracts.

"We realize that it is in the best interests of everybody involved here to reach a consensual agreement," Mesaba spokeswoman Elizabeth Costello said.
The bankrupt regional carrier has asked its pilots, mechanics and flight attendants unions to lower their labor costs by 19.4 percent. But the unions have resisted that level of cuts. They have pressed Mesaba to provide them with alternate business models that incorporate some small-jet flying. The company's business plan is based solely on flying 49 Saab turboprops, which is about half the fleet Mesaba had in October when it filed for bankruptcy.
On Feb. 24, U.S. Bankruptcy Judge Gregory Kishel started hearing Mesaba's motion to void its current contracts with the three big labor unions. Under bankruptcy law, Kishel was expected to rule on that motion by March 27.
Management and labor agreed Tuesday to push back the judge's deadline to April 25.
Tom Wychor, chairman of the Mesaba pilots union, said both sides have spent so much time in court arguing their positions that they have had little time to bargain on new contracts.
Tuesday was Day 10 in the courtroom, and most of the negotiating sessions that have been held with the unions in recent weeks have been quite brief.
"By giving us a little time to focus on negotiations, and not just on litigation, we believe that we'll have a better opportunity to find solutions that will work for both the company and the pilot group," Wychor said.
The court hearing will resume Monday. Kishel said he expects all testimony to be completed next week.
Mesaba executives said earlier that they needed pay cuts and new labor contracts in place by April 1, so now they are showing some flexibility with their union leaders who had complained that management was attempting to rush concessionary bargaining.
Tonight, Mesaba employees are taking part in a labor unity rally at the Mall of America.
Liz Fedor • 612-673-7709