"Northwest troubles could push Mesaba into bankruptcy"

Friday, October 7, 2005

Filing: Northwest troubles could push Mesaba into bankruptcy 
The Associated Press


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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