Mesaba Unions Make Pay-Cut Offer

The bankrupt carrier is seeking permission to impose terms against the unions' will on Oct. 15.


With Mesaba Aviation Inc.'s cash dwindling, its unions made what they called an 'offer to save their airline' on Tuesday, but it fell well short of what the feeder carrier for Northwest Airlines Corp. has said it needs.

The bankrupt carrier is seeking permission to impose terms against the unions' will on Oct. 15. The unions have said they will strike if that happens, and that travelers should avoid Northwest regional flights beginning on that day. On Monday, Mesaba asked a judge to block a strike, which it said would force it to liquidate.

Mesaba pilots, flight attendants and mechanics all offered to take 15 percent pay cuts in a three-year contract -- similar to what they've offered in the past -- plus bigger concessions on health benefits. The airline has said it needs 19 percent cuts lasting six years so it can negotiate a new agreement as a regional carrier feeding Northwest flights.

The unions said their offer would give Mesaba a profit margin of at least 6 percent; the airline wants 8 percent.

Mesaba, a unit of MAIR Holdings Inc., had profit margins of 2 percent to 3 percent in recent years, the unions said. Mesaba gets its planes, passengers and revenue from Northwest, which filed for bankruptcy protection in September 2005. Mesaba followed a month later.

'Mesaba will not only be able to reorganize and exit successfully from bankruptcy with the level of cuts offered by the unions, but it would also achieve profit margins that substantially exceed those of previous years,' the unions said in a written statement.

Company negotiators had no immediate reaction to the offer, said Tim Evenson, head of the Mesaba branch of the Association of Flight Attendants. He said the new offer included deeper concessions on health care benefits than earlier union proposals.

'We moved some. We didn't move a lot; that would make the health care unaffordable,' Evenson said.

Mesaba spokeswoman Elizabeth Costello said the bankruptcy judge has found that the cuts the company wants are necessary for its survival. On Sept. 12, company lawyers said Mesaba was down to about $10 million in cash and was losing about $1 million a week, according to court documents.

Airline unions have argued they have a right to strike when airlines impose new terms in bankruptcy, but the issue has rarely come before a judge.

In the most recent case, a judge blocked flight attendants at Northwest Airlines from walking out after the airline imposed pay cuts and work rule changes on July 31. Their union has appealed, and has also asked federal mediators to release them from talks, potentially starting a 30-day clock ticking toward a walkout.

Mesaba said a strike would kill the company.

'At this late stage of the bankruptcy proceeding, the creditors would brook no job action before demanding liquidation,' Mesaba said on Monday in its request to block a strike.

Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.



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