NWA - Now Wants to Acquire Mesaba

[JEP]

can you say flow through , how the gonna merge seniority #'s

NWA in talks to acquire Mesaba

As a Northwest subsidiary, Mesaba and its workers could gain some security.
By Liz Fedor, Star Tribune
Last update: December 20, 2006 – 11:18 PM

Northwest Airlines said Wednesday it is in talks to acquire Mesaba Airlines, a move that could give the bankrupt regional carrier and its thousands of employees a more certain future.

A deal could create jobs and provide more financial security to the Eagan-based regional carrier, which faced a liquidation threat this year when it was struggling to achieve labor cuts. For the 5.7 million passengers who flew Mesaba last year, a Northwest pact would mean continuity in service on the mostly short-haul flights Mesaba operates.

"Northwest ownership would secure our core business and, in the long run, position us for growth," John Spanjers, Mesaba's president, said late Wednesday in a letter to its more than 3,000 employees.

Mesaba currently operates regional flights exclusively for Northwest, but it does so as a separate company.

If Northwest completes the transaction, Northwest spokesman Bill Mellon said, Mesaba would become a wholly owned subsidiary of Northwest.

Such a deal would appear to cut out Mesaba's current owner, MAIR Holdings Inc. of Minneapolis. MAIR has been a lightning rod with Mesaba employees because of the large amount of money that Mesaba transferred to MAIR before its bankruptcy filing. Minnesota Twins owner Carl Pohlad owns about 10 percent of MAIR and was its chairman from 1995 through early this year, when his son, Robert, succeeded him.

Northwest is MAIR's largest shareholder at about 28 percent.
Mesaba followed Northwest into bankruptcy in October 2005 after Northwest skipped some large payments to Mesaba. Mesaba also has reduced its workforce because Northwest cut its fleet in half -- from 100 to 50 planes.

Mellon said Northwest has talked with Mesaba leaders about becoming a co-sponsor of Mesaba's business plan of reorganization, which must be approved by Judge Gregory Kishel before Mesaba can exit bankruptcy. Under the scenario that has been discussed, Mellon said, "Northwest would become the owner of Mesaba in a principally noncash transaction."

Mellon said, "Northwest believes that having Mesaba as part of the Northwest family is the preferred way to operate the Northwest Saab 340 fleet," a reference to the turboprops that serve many small markets out of Northwest's Twin Cities, Detroit and Memphis hubs. "The agreement would allow Northwest to continue to offer service to a number of communities that depend on the Saab fleet to provide convenient connections to Northwest's global network," Mellon said.

Northwest has received bids from Mesaba and other regional carriers to operate 50- and 76-seat regional jets. As of Wednesday, Northwest had not awarded that flying.

Tom Wychor, chairman of the Mesaba pilots union, said he was encouraged to learn of the discussions. "Mesaba's past has been serving Northwest and I have always believed that our future would be in serving Northwest as well," Wychor said. He added that an acquisition would strengthen the relationship.

Northwest's Mellon also said, "We have reviewed the proposed Mesaba transaction with the Northwest Creditors Committee," indicating that the talks are serious.

Legal morass
Mesaba's Creditors Committee is pursuing MAIR Holdings, whose only other property is tiny Big Sky Airlines in Montana, to satisfy some of its financial claims.

MAIR sued Mesaba and the Mesaba creditors in October in an attempt to block them from gaining access to the parent company's substantial cash. Mesaba paid MAIR $111 million in dividends between 2002 and 2004. Mesaba also paid MAIR $11 million in management services fees from 2003 to 2005.

Mesaba's employees, who were asked for double-digit concessions, were angry about money that MAIR absorbed. In some of their informational pickets, they carried signs saying, "What does Paul Foley do?" Foley is MAIR's CEO and a proxy statement released in July said Foley was paid a salary of $350,000 and a bonus of $175,000.

For much of this year, Mesaba engaged in difficult concessionary bargaining with its employees. In September, U.S. District Judge Michael Davis ruled that Mesaba had not "fairly and equitably spread the burden of reorganization among all relevant parties, particularly MAIR."

MAIR did not file for bankruptcy when Mesaba entered Chapter 11.
MAIR made limited comments Wednesday regarding Northwest's interest in buying Mesaba. "These discussions are at a very preliminary stage and as such do not yet merit specific comment," said MAIR spokesman Jon Austin. "We will continue to work with Mesaba on their restructuring."

However, in statements released by Mesaba and Northwest, they said they want to "conclude a more definitive agreement" with each other.
Liz Fedor • 612-673-7709 • lfedor@startribune.com

[Maximillian_Jenius]

Originally Posted by News Bot

A deal could create jobs and provide more financial security to the Eagan-based regional carrier.

LMAO. Comair & ASA would seriously beg to differ!

[pilot602]

Easy way to get jets and crews for "Compass."

[Minnesota_Flyer]

Originally Posted by pilot602

Easy way to get jets and crews for "Compass."

Mesaba doesn't own any jets.

[pilot602]

Err... Avros

[jtrain609]

Mesaba HAD jets, a few CRJ's and the Avro's.

I don't think anybody in the Northwest system fly's 328's.

[pilot602]

Ah

[jtrain609]

Hey call me sometime when you end up with an LAX lay over and you're bored, I live like 20 miles from there.

[pilot602]

Originally Posted by jtrain609

Hey call me sometime when you end up with an LAX lay over and you're bored, I live like 20 miles from there.

HAHAHHAHAHA ... what's an "LAX Layover?"

[jtrain609]

Dunno, Dale pulled a line a few weeks ago outta FAT where they dead headed him and his crew to LAX the night before their first actual flight and he was kickin' it there long enough for me to take him out to dinner.