Mesaba says ruling on request to reject collective bargaining agreements expected late next week

By Jennifer Lanning Drey

Eugene, Ore., June 28 - Mesaba Aviation, Inc. was told it will receive a ruling toward the end of next week on its request to reject its collective bargaining agreements with its pilots, mechanics and flight attendants, according to Mesaba spokesperson, Elizabeth Costello.

The ruling will come from U.S. Bankruptcy Court for the District of Minnesota, where closing arguments in the case will be heard on Thursday.

The company's original request to reject the CBAs was denied by the court on May 18, but the court said the company could re-file the motion.

At that time, the court said it found Mesaba's core business assumptions to be "reasonable and necessary," including the 19.4% labor cost concessions over six years.

According to Mesaba's most recent filing, despite the company's attempt to reach consensual agreements, the unions still feel Mesaba does not need the proposed 19.4% labor concessions.

Mesaba said its survival is dependent upon rejection of the bargaining agreements, and it continues to lose money at the rate of $2 million to $3 million per month.

Absent any debtor-in-possession financing, the company said the accelerating losses will result in it exhausting its cash by the end of August.

In May, Mesaba said its motion was denied only due to its failure to provide a working financial model to the unions and its modeling of workforce attrition.

Mesaba, an Eagan, Minn.-based Northwest Airlines affiliate, filed for bankruptcy on Oct. 13, 2005. Its Chapter 11 case number is 05-39258.

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