Mesaba, Unions Await Ruling

A bankruptcy court judge is expected to decide today whether Mesaba Airlines can scrap its labor contracts with about 1,500 union employees and impose pay and benefit cuts it says it needs to survive.

If Judge Gregory Kishel allows the move, Mesaba said it would impose wage, benefit and other cuts totaling 17.5 percent over four years, which could increase to 51/2 years depending on Mesaba's fleet growth.

The terms are less severe than the airline's earlier demands of 19.4 percent in cuts over 51/2 years.

The unions for Mesaba's pilots, flight attendants and mechanics object to imposed terms and say they're ready to strike immediately if that occurs.

The Eagan-based airline wants to impose the new work terms on Sunday because it's running out of cash.

Michael Meyer, a lawyer for Mesaba, told the court on Tuesday that the "survival of the company" is at stake.

Kishel on Friday is scheduled to hear Mesaba's request to block the unions from striking, an issue that becomes moot if Kishel doesn't authorize Mesaba to void its contracts.

Mesaba said in mid-September that it had about $10 million in cash and was losing about $1 million a week. Company spokeswoman Elizabeth Costello wouldn't update those figures on Wednesday.

Mesaba, which flies to smaller cities exclusively for Northwest Airlines, maintains that cutting its labor costs is crucial to its ability to bid for air service contracts with Northwest and other airlines, to close on a $24 million financing agreement and attract new equity investors.

The airline has been down this road before. In July, Kishel said Mesaba could void its contracts, but that was overruled last month by U.S. District Court Judge Michael Davis.

Davis ruled that Mesaba failed to negotiate in good faith on snapbacks, which refer to when pay and benefits would be restored, and that it failed to consider how its parent company, MAIR Holdings Inc., might share the financial burden of reorganization.

Back in Kishel's court this week, Mesaba and its unions launched often acrid and heated arguments. Lawyers for the three unions told the court on Tuesday and Wednesday that Mesaba has not bargained in good faith and that any proposal improvements have come recently, after Davis' ruling.

Simultaneously, Mesaba has resumed negotiations with some of its unions to reach agreements. The airline last met with the Aircraft Mechanics Fraternal Association on Tuesday night and with Airline Pilots Association on Monday. The airline has not negotiated with the Association of Flight Attendants since early June regarding a dispute over federal mediation.

Two of the unions on Wednesday asked for more time to reach agreements.

In the meantime, the unions are preparing for a possible strike. The pilots union this week sent notices to its 620 pilots to clear their personal belongings from company property by Sunday in case of a strike or liquidation, said Tom Wychor, chairman of ALPA at Mesaba. The flight attendants union is getting members ready for possible random work stoppages, an often threatened but seldom used program it calls "Chaos."

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