Northwest Withholds Money From Regional Carrier Mesaba

The squabble between Northwest Airlines and one of its regional carriers, Mesaba Airlines, is growing testier as Northwest withholds more money from Mesaba.

Both carriers are in the midst of Chapter 11 bankruptcy reorganizations.

Mesaba, which flies passengers between Northwest's hub airports and smaller cities, including Aberdeen, gets 93 percent of its revenue from Northwest. And all of Mesaba's planes are leased from that carrier.

But Eagan-based Mesaba figures Northwest has now shorted it by more than $37 million when it comes to paying it for regional air services. The underpayments started after Northwest's mid-September bankruptcy filing.

Mesaba will be in the U.S. Courthouse in Minneapolis on Thursday to seek an order compelling Northwest to pay it $5.2 million.

Northwest withheld that amount from a payment recently due Mesaba. It deducted the money because Mesaba choose not to give Northwest a $5.2 million October payment for leased planes.

Previously, Northwest had withheld about $32 million in payments owed Mesaba. That was for flying done before Sept. 14.

Mesaba spokeswoman Elizabeth Costello said bankruptcy law allows Mesaba to skip lease payments to Northwest for 60 days. Northwest has taken similar actions in its own bankruptcy, she said.

"But they are saying, 'You can't do that,'" said Costello.

Northwest had no comment on the dispute.

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