Pilot union reaches deal with Mesaba

Talks with attendants and mechanics continue, as the carrier struggles through bankruptcy.

Liz Fedor, Star Tribune
October 29, 2006

Pilots reached a deal Saturday with Mesaba Airlines, capping 10 months of bitter labor struggles in which the bankrupt airline's future has been in doubt.

The tentative agreement emerged five days after a bankruptcy judge in Minneapolis blocked a potential strike by pilots, flight attendants and mechanics at the Eagan-based regional carrier, which employs 3,170.

Mesaba flies exclusively for Northwest Airlines and serves 88 cities, and like other regional U.S. airlines, it has faced intense pressure to reduce its operating costs. Mesaba is in a bidding war with other regional airlines to secure flying business from Northwest and other airlines.

Details of the pilots' deal were not released Saturday. Talks with the flight attendants and mechanics were continuing.

If a deal had not been reached with the pilots, Mesaba had the authority from a bankruptcy judge to impose labor cost cuts of 17.5 percent. Flight attendants and mechanics are facing that same harsh reality.

"We said all along that our efforts were focused on a consensual agreement, and this is another major step toward the successful restructuring of our company," Mesaba spokeswoman Elizabeth Costello said Saturday.

Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association (ALPA), said the union's 12-member executive council "has the tentative agreement under review." That body will be studying the deal's elements in the coming days, so "we will not release any data until they have completed their work," Wychor said late Saturday.

Mesaba, founded in northern Minnesota in 1944, operates regional flights out of Northwest's Twin Cities, Detroit and Memphis hubs. In 2005, Mesaba transported 5.7 million passengers as a Northwest Airlink carrier. It filed for bankruptcy a year ago after Northwest Airlines skipped some of its payments.

Mesaba has been trying to slash its labor costs, so it can retain a flying contract with Northwest for Saab turboprops and secure additional flying from Northwest with 50- and 76-seat regional jets.

Mesaba had only $10 million in "available cash" left last month, and Mesaba's creditors have been threatening to seek liquidation of the company if management fails to achieve labor savings.

Mesaba has lined up $24 million in debt financing to allow it to keep operating, but management can't get its hands on that money until it cuts its labor costs.

Mesaba could have imposed labor cost cuts on the three labor unions as of 12:01 a.m. Thursday, but Mesaba management delayed taking that action in the hope of negotiating deals. Concentrated talks began Wednesday and resulted in the pilots' deal on Saturday.

"This has been a challenging process and we appreciate ALPA's efforts in working toward a solution," John Spanjers, Mesaba's president, said in a statement Saturday. "We look forward to continuing to work together to ensure Mesaba emerges successfully from bankruptcy and is positioned for growth."

Mesaba's rank-and-file pilots have the right to accept or reject the tentative deal.

Leaders of the Association of Flight Attendants (AFA) and Aircraft Mechanics Fraternal Association (AMFA) were still engaged in their own negotiations late Saturday..

"ALPA remains very hopeful that our labor coalition partners, AMFA and AFA, reach tentative agreements in the very near future," Wychor said.

Throughout the lengthy negotiations, labor leaders at Mesaba have said they were willing to agree to a fair level of cutbacks. But they also argued they need provisions in their contracts that will restore wages and allow Mesaba's employees to benefit as the company grows and makes money.

Tim Evenson, president of the Mesaba flight attendants union, said talks with the airline have been "very constructive" since Wednesday. "We remain optimistic that a consensual agreement is still within reach."

Negotiated agreements "would foster a better working relationship" with management, he said. Union leaders have said they don't believe the company could survive if concessions were imposed on Mesaba's union employees, because they argue many people would simply quit their jobs.

Nick Granath, a mechanics union attorney, said Saturday night that AMFA negotiators "will do everything we can to reach a deal" and will keep bargaining today.

"If we don't get an agreement, we will continue to fight in court," Granath said. Lacking a deal, he said, "We will proceed through the courts to overturn the imposition of labor cost cuts."

On Tuesday, union lawyers filed a notice of appeal of U.S. Bankruptcy Judge Gregory Kishel's ruling that gave Mesaba the authority to toss out existing labor contracts. Also, Kishel is the judge who granted a strike injunction to Mesaba on Monday.

Mesaba was flying 100 airplanes for Northwest before the big carrier decided to phase out Mesaba's old Avro jets. Mesaba's fleet is expected to drop to 50 planes by the end of November.

Mesaba is a subsidiary of Minneapolis-based MAIR Holdings. Northwest Airlines and Minnesota Twins owner Carl Pohlad own substantial portions of MAIR, and Pohlad is the former MAIR board chairman.

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