Northwest to take Mesaba under its wingby Stephanie Hemphill, Minnesota Public Radio
Northwest and Mesaba Airlines announced Monday they have agreed on the terms of a merger. Both of the Eagan-based carriers are in bankruptcy. Under the plan, Mesaba would become a wholly-owned subsidiary of Northwest.
Eagan, Minn. — Northwest owns the planes Mesaba uses, sets the schedules, and sells the tickets. In the past year Northwest has reduced the number of flights assigned to Mesaba.
Mesaba spokeswoman Elizabeth Costello says becoming part of Northwest secures the airline's current level of business and may bring more.
"We have 49 Saab aircraft that we fly for Northwest right now. And all of our employees right now will just continue to work on those aircraft, and positioning the company for growth as we go forward," she said.
Mesaba's pilots are also pleased with the deal. Tom Wychor, with the Airline Pilots Association, says there are no guarantees, but the merger at least holds out hope for more flights, and better-paid flights, for pilots.
"We do know that there are some additional commuter jet aircraft that do need to be allocated; I think Mesaba's well positioned to do that work, we've certainly done that work very well for the last decade, and I know the employees at Mesaba would very much like to get back into that business," Wychor said.
One attraction of the plan is that the companies will be run separately, according to Tim Evenson, with the Association of Flight Attendants.
"I know that Northwest has a rocky relationship with their unionized groups," Evenson said. "And to my understanding, Mesaba is going to be run the same as it is now. Our relationship right now with our management has been very successful."
Under the terms of the deal, Mesaba would receive a $145 million claim against Northwest. Mesaba would sell that off to pay its creditors.
When all is said and done, Northwest would wind up with Mesaba, and Mesaba's parent company, MAIR holdings would receive between $30 million and $60 million.
Earlier this month, some MAIR shareholders said the price Northwest is paying for Mesaba is far too low. They could not be reached for comment on reports of the agreement, and it's not clear whether they will continue to try to block the plan.
MAIR's board and Mesaba's board have both approved the deal, but the final decision rests with two bankruptcy judges.