MINNEAPOLIS & ST. PAUL, Minn.- LAWFUEL – Legal News & Law Jobs -Sept. 14, 2006–United States District Court Judge Michael J. Davis today reversed for two specific reasons Mesaba Airlines’ 1113(c) rights to reject its collective bargaining agreements and impose new contract terms on its unions and remanded the case to the Bankruptcy Court for further proceedings.
At the same time, the Court (as did Bankruptcy Court Judge Gregory Kishel) affirmed the company’s need for 19.4 percent labor cost reductions over a six year period and its business plan requiring an 8 percent profit margin.
“While we are disappointed with Judge Davis’ decision and will review all of our legal options to address his concerns; we are committed to successfully restructuring this company,” said John Spanjers, Mesaba Airlines president and COO. “What remains unchanged is the company’s need to find a solution quickly to ensure the survival of the airline.”
Even before the decision was handed down today, the company had invited all three unions to meetings this week to share detailed information about the company’s cash position which is quickly deteriorating. The company has confirmed meetings with ALPA, AFA and AMFA for the end of this week and beginning of next week. Mesaba remains committed to working with the unions to reach consensual agreements with each work group.
It’s important to note, the Court overturned the Kishel decision on only two points, one of which, the need to discuss with the unions the issue of wage restoration or snap backs, already has been discussed in negotiations with the pilots’ union. The company is reviewing the Court’s other concern as related to MAIR Holdings, Mesaba’s parent company.
Mesaba operates as a Northwest Jet Airlink and Airlink partner under service agreements with Northwest Airlines. The airline serves 86 cities in the United States and Canada from Northwest’s and Mesaba Aviation’s three major hubs: Detroit, Minneapolis/St. Paul, and Memphis. Mesaba Aviation operates an advanced fleet of regional jet and jet-prop aircraft, consisting of the 69-passenger Avro RJ85, the 34 passenger Saab SF340, and the 50-passenger Canadair Regional Jet. Mesaba filed for Chapter 11 bankruptcy protection on October 13, 2005 and continues to operate as a debtor-in-possession. Mesaba maintains a web site at www.mesaba.com.
Mesaba Airlines is a wholly owned subsidiary of MAIR Holdings, Inc. MAIR Holdings, Inc. is traded under the symbol MAIR on the NASDAQ National Market.
More information about Mesaba Airlines is available on the Internet at: http://www.mesaba.com
