Mesaba Airlines will get another month to talk with unions in the hopes of winning the labor concessions it says it needs to restructure and exit bankruptcy.
The judge overseeing the Chapter 11 case for Mesaba delayed until April 25 a ruling on voiding the airline's labor contracts, after management stepped back from a demand that it needed new contracts by April 1. The judge had been expected to rule on that issue by March 27. The extra time will give both sides more breathing room for negotiations.
Mesaba, which flies regional jets for Eagan-based Northwest Airlines Corp. and followed the larger carrier into Chapter 11, is looking for labor-cost cuts of 19.4 percent. The airline's fleet has been cut drastically since Northwest scaled back operations.
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Northwest Airlines Corp., which is demanding additional security deposits for aircraft subleased by its regional partner Pinnacle Airlines Corp., has extended the deadline for the request, Pinnacle said in a securities filing.
The issue stems from a dispute between Eagan-based Northwest and Pinnacle of Memphis. In September, Northwest requested that Pinnacle pay $21.7 million in additional aircraft sublease security deposits by March 1. Pinnacle disputed Northwest's right to seek the additional security deposits.
Northwest extended its deadline to April 15, while the parties continue discussions "regarding their future business relationship."
Exactly what that relationship will be is unclear. Northwest has cut the fleets of both Pinnacle and Mesaba Airlines, its other regional partner, and signaled that it wants to renegotiate the terms of its contracts with them or seek another partner.
Last week, Northwest said it is buying FLYi Inc.'s operating certificates for Independence Air, which stopped flying in January after failing to find a buyer, for $2 million. The deal paves the way for Northwest to launch its own regional subsidiary. Northwest's recent tentative agreement with the Air Line Pilots Association allows the airline to operate 76-seat aircraft.
Earlier this month, JPMorgan analyst Jamie Baker told the Associated Press that Northwest's recent labor agreement with its pilots included little promise for Pinnacle.
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