Northwest Details Regional Subsidiary Plan

MINNEAPOLIS_Northwest Airlines Corp. said it hopes to have its new regional jet subsidiary flying as early as June, according to a filing that lays out its plans for the new airline for the first time.

The subsidiary would be called Compass Airlines and could have as many as 36 small jets flying within five years, according to a Northwest filing this week with the Transportation Department.

Northwest said it hopes to begin flights in June with a single 50-seat airplane flying twice daily between Washington Dulles and Minneapolis-St. Paul International Airport. Compass will eventually fly 76-seat airplanes during its first year, adding at least 36 such planes within five years.

Northwest recently bought the FAA-required operating certificate of bankrupt FLYi Inc., the parent company of Independence Air, which shut down in January. However, before it can use the operating certificate it needs other approval from the Department of Transportation, said Laura Brown, a spokeswoman for the Federal Aviation Administration.

Northwest's chief financial officer, Neal Cohen, will be CEO of Compass, but five other Compass managers will be from Independence Air.

The filing said the new airline will choose the Bombardier CRJ-900 or the Embraer EMB-175 for its fleet in April, with delivery beginning in March 2007. It expects to have at least 36 planes by the end of 2010.

Northwest relies more on regional flying than many other airlines because of its network of small Midwestern cities.

"The expansion of Northwest's regional flying through the proposed Compass Airlines operation is an essential part of Northwest's restructuring plan," the company said in a statement on Wednesday. It said Compass would eventually ferry passengers to all three of its hubs - Detroit, Minneapolis, and Memphis, Tenn.

Northwest regional flights are currently handled by Mesaba Airlines and Pinnacle Airlines. Northwest has requested bids for that flying, but has not disclosed the results. Even with Compass Airlines, Northwest may need another regional carrier because of limits on regional flying in its contract with pilots.

Besides remaking how it handles regional flying, Northwest has been seeking pay cuts from all of its workers. On Wednesday, the union that represents baggage handlers said a May 15 trial date has been set for Northwest's request to reject their union contract.

Its 5,600 baggage handlers and ramp workers voted down Northwest's proposed pay cuts and authorized a strike on March 7.

Their union, the International Association of Machinists, has said it expected talks to resume. Northwest has offered no signs of returning to the bargaining table, though, saying only that it would seek to throw out the union contract.

Spokesman Kurt Ebenhoch declined to comment Wednesday.

In a message on its Web site, the union pointed out to members that pilots and flight attendants have both reached tentative agreements with the airline. It also pointed out Northwest's $2.6 billion 2005 loss, which the union called "staggering."

"In these circumstances, the best possible course is to pursue a negotiated settlement that makes a judge's ruling on the fate of our contracts unnecessary," the union said.

Northwest has been seeking pay cuts from all its employees, either through negotiations or by getting court permission to terminate contracts.

Pilots are set to begin voting on their tentative agreement April 6 through May 3. But approval of the package, with its 24 percent pay cut, is far from certain. Mark McClain, chairman of the union's governing council, endorsed the deal. But the council itself took no position on it, and the head of the Detroit local, A. Ray Miller, has said he is advising pilots to vote against it.

Flight attendants have also reached a tentative agreement but have not scheduled a vote.

>

Loading