Judge gives Mesaba, unions one more shot at reaching deals
The bankruptcy judge was set to rule on the airline's bid to void its contracts, but at the unions' request he gave the two sides until Monday.
Liz Fedor, Star Tribune
October 13, 2006

Marathon labor negotiations are expected through this weekend between Mesaba Airlines and its three large labor unions after a bankruptcy judge decided Thursday that they should make one final attempt to reach deals.

If the parties fail to negotiate concessionary contracts by 2 p.m. Monday, U.S. Bankruptcy Judge Gregory Kishel said he will issue his ruling concerning Mesaba's motion to toss out its labor contracts. Kishel was poised to make that ruling Thursday, but he agreed to a request by union attorneys to defer his decision.

For Mesaba's passengers, the judge's decision removes the immediate threat of a strike.

Rob Clayman, an attorney for the Association of Flight Attendants (AFA), asked the judge for a "last opportunity" to negotiate deals.

Had Kishel permitted Mesaba to toss out its current labor contracts, the airline had planned to seek an injunction today to block any strike.

Today is the one-year anniversary of the Mesaba bankruptcy filing, and management has been seeking labor concessions since December.

"Everybody is clear that this process has gone on too long," Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association, said after Thursday's court proceeding. "We are committed to help bring about a successful conclusion for Mesaba Airlines with a consensual agreement."

Mesaba is ready to impose labor cuts of 17.5 percent; the three unions have offered cuts of 15 percent.

"We are not that far apart," Wychor said.

In addition to reaching agreement on concessions, he said, the pilots and other labor unions must negotiate with the airline concerning wage restorations as the company recovers. They also will be discussing an employee equity stake in the carrier.

Kevin Wildermuth, lead negotiator for the Aircraft Mechanics Fraternal Association, said he was encouraged by the judge's decision.

"Neither party is given an advantage, which should foster the best negotiating period possible," he said.

Mesaba spokeswoman Elizabeth Costello said, "Our efforts are focused on reaching consensual agreements and we are hopeful that this weekend's meetings will be productive."

The airline's creditors will be closely watching the weekend talks. Tim Robinson, an attorney representing creditors, said: "We recognize that the recovery that our constituents could expect to receive would be far greater in the event that all parties are able to reach consensual deals." The creditors could seek conversion of the bankruptcy from a Chapter 11 reorganization to a Chapter 7 liquidation if they believe the company cannot be salvaged.

Kishel directed the creditors committee to hold off on any filing until it sees what happens in the last-ditch labor talks.

On Thursday, the creditors attorney and Mesaba attorney Michael Meyer asked Kishel to rule immediately, but the judge sided with the unions' request to keep bargaining.

Liz Fedor • 612-673-7709 • lfedor@startribune.com