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Published on 7/14/2006 in the Prospect News Distressed Debt Daily.

Mesaba granted court approval to reject collective bargaining agreements

By Jennifer Lanning Drey

Eugene, Ore., July 14 - Mesaba Aviation, Inc. obtained court approval to reject its collective bargaining agreements with flight attendants, pilots and mechanics, according to a Friday filing with the U.S. Bankruptcy Court for the District of Minnesota.

The ruling does not mean changes to the collective bargaining agreement will be imposed automatically, but authorizes Mesaba to make them when it determines appropriate, according to a company news release.

Mesaba must give the labor groups a 10-day notice before rejecting the contracts and imposing new terms, according to the motion.

"We prefer consensual agreements and believe that they are in the best interest of all involved - the company, its employees and our passengers. However, Northwest Airlines' bankruptcy and its subsequent actions, along with the continuing distress impacting the entire industry, require us to take sweeping measures to secure Mesaba's future," said John Spanjers, president and chief executive officer of Mesaba, in a news release.

The company said the ruling does not impact its operations or its obligations to Northwest or to its passengers.

Following the decision, Mesaba pilots said they would strike if a consensual agreement is not achieved, according to a news release from the Air Line Pilots Association (ALPA), International.

The organization said Mesaba is demanding wages far below industry norms and that ALPA plans to file an immediate appeal.

"If management refuses to compromise, they may be triggering the end of Mesaba. We simply will not work under the terms management seeks to impose," said Tom Wychor, chairman of the ALPA unit at Mesaba, in the release.

ALPA's national leadership has pledged all of its resources to supporting Mesaba pilots in the dispute, according to the release.

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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