Oct 7, 2005 4:56 pm US/Central
Mesaba May File For Bankruptcy Protection
Minneapolis (AP) ―
Northwest Airlines Corp.'s regional carrier Mesaba Aviation Inc. is considering filing for bankruptcy protection because of sharp reductions in its schedule, according to a regulatory filing by its parent company on Friday.
Mesaba flies under the Northwest Airlink name, picking up passengers in small cities and funneling them into Northwest's hubs. It gets its schedule, passengers, planes and revenue from Northwest, which filed for Chapter 11 protection on Sept. 14. Northwest has said it will shed unprofitable routes.
"Mesaba is focused on reducing all areas of its cost structure, but will incur substantial losses in the third and fourth fiscal quarters," Mesaba parent MAIR Holdings Inc. said in a filing with the Securities and Exchange Commission. "Mesaba is considering all options available to it, including a court supervised restructuring under Chapter 11 of the Bankruptcy Code."
Northwest has told Mesaba it will remove 10 Saab B+ aircraft on Jan. 4, and that it probably won't be able to deliver 13 more Canadair Regional Jets on time, according to the filing. Northwest also intends to take away Mesaba's 35 Avro Regional Jets; nine of them were already planned to come out of service on Oct. 31.
Mesaba is MAIR's largest business, although it also runs Big Sky Transportation Co., a Billings, Mont.-based regional airline.
Northwest's other regional carrier is Pinnacle Airlines Inc. based in Memphis, Tenn. It operates 139 Canadair jets with 44 or 50 seats. Northwest has told it to park 15 of those jets beginning Oct. 31. Pinnacle said that would reduce quarterly earnings by as much as 15 percent below what it had expected before.
MAIR shares rose six cents to close at $5.32 on the Nasdaq Stock Market. They traded around at $9.50 last month before Northwest filed for bankruptcy protection. Pinnacle shares dropped 49 cents, or 8.9 percent, to close at $5.04 on the Nasdaq.
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Northwest Airlines was founded in 1926, when it began carrying air mail from the Twin Cities to Chicago on a pair of rented, open-cockpit biplanes. The company began transporting ticketed passengers almost a year later.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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