Judge Delays Ruling on Strike at Mesaba

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Oct18

Judge Delays Ruling on Strike at Mesaba

Rob Willers

October 18, 2006

Know More:

Will Mesaba Airlines collapse by the end of this week? A US judge had delayed the ruling on whether or not Mesaba employees can strike, that will come later. But the airline has the right at 12.01am on Wednesday to impose wage cuts on their employees. Those employees said they would strike if that occurred.

The airline wants a 17.5% wage concession from their employees just so they can be around next week. All of this continues as their cash dwindles in the bank.

Roughly less than $10 million is what Mesaba has on hand and can only tap into their $24 million in debt refinancing when labor contracts are settled. A difficult situation as the airline is loosing millions.

US Judge Kishel said he would rule later this week or early next week and would not be hurried in his decision. He barred the airline from imposing new terms before he issues his ruling.

He also barred creditors from seeking to liquidate the airline for now -- something they had threatened to do if Mesaba didn't get labor deals it says it needs to keep flying for Northwest, its only customer.

Mesaba President John Spanjers testified that the airline would be devastated by a strike, and that he expects that creditors would then step in to sell off its assets.

"Our flight operations would cease, and we would likely see the creditors committee step in and seize our assets," he said.

Northwest has said it has a contingency plan for a strike, but has declined to provide details. Northwest pilots have said they won't fill in for striking Mesaba pilots.

For many cities in the northern plains, Mesaba provides the only air service. Many cities with that service are watching the strike with a close eye.

WCCO.com

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