Northwest Airlines, Owing Mesaba Millions, Misses Another Payment

MINNEAPOLIS (AP) -- Northwest Airlines Corp. missed a payment for Mesaba flights a month after failing to pay the regional carrier $19 million for flights made in the last two weeks of August.

Mesaba does nearly all of its business with Northwest, which shares a portion of its passenger revenue with the smaller airline. The unpaid money represents close to one month's revenue for Mesaba.

Officials for Northwest refused to comment on the failed payment Monday. Mesaba officials couldn't be reached for comment.

Northwest filed for Chapter 11 bankruptcy protection two weeks ago. Last week, the airline told Mesaba that it planned to park nine 69-seat jets that Mesaba operates on its behalf. Northwest also said it was considering whether to permanently retire all 35 of the larger jets.

The missed payments pose a more immediate and grave threat to Mesaba, which employs 3,950 people.

One analyst said the company will have to weigh job cuts and other cost reductions, and that a bankruptcy filing by Mesaba is not out of the question.

''Mesaba relies almost exclusively on agreed-upon revenue, so any delay or nonpayment is critical,'' said Douglas Abbey, a partner in the Washington, D.C.-based aviation industry consulting firm the Velocity Group. ''This is a business with low margins and high cash outlays.''

Mesaba's woes could cause ripples across Minnesota, where it is the only scheduled airline providing passenger service to Grand Rapids, Bemidji, Brainerd, Hibbing, International Falls and Thief River Falls.

Northwest skipped a Sept. 13, $22 million payment owed Pinnacle. Monday, Northwest directed Pinnacle to ground 15 of the 139 jets it operates. Northwest owns the planes but leases them to Pinnacle.

Loading