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http://biz.yahoo.com/bw/051013/135732.html?.v=1
Press Release
Source: Mesaba Aviation, Inc.
Mesaba Aviation Files for Chapter 11 Reorganization to Expedite Restructuring
Thursday October 13, 4:58 pm ET
Mesaba Will Continue Normal Operations
EAGAN, Minn.--(BUSINESS WIRE)--Oct. 13, 2005--Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings, Inc. (NASDAQ:MAIR - News), today announced it has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Minnesota.
The company emphasized that it will continue its regular operations to serve customers, honor tickets, and operate its schedule as a Northwest Airlink partner.
"This was a difficult but necessary step; Northwest's actions since filing bankruptcy along with the continuing distress affecting the entire industry requires us to change and to do so quickly," said John Spanjers, Mesaba Airlines president and chief operating officer. "The changes imposed on us by Northwest since its filing in September have left us with insufficient revenues to support our cost structure.
"This work will be invisible to our passengers," Spanjers continued. "As we go through this process, we will remain focused on delivering the highest levels of safety, reliability and service that our passengers have come to expect from us."
Prior to its filing, Northwest on September 12th failed to make a semi-monthly payment of approximately $18.5 million due to Mesaba under the Airline Services Agreement (ASA) for services rendered in the last half of August. On the following payment due dates of September 26 and October 11, Northwest made partial payments of $1.6 million and $15.7 million respectively. As a result, Mesaba has a net unsecured claim of approximately $30 million in the Northwest Chapter 11 case.
In addition, Northwest has advised Mesaba that it intends to reduce the number of Avro and Saab aircraft in Mesaba's fleet and that Mesaba should count on receiving only two of the fifteen new CRJ aircraft committed under the ASA. Further, Northwest also has notified Mesaba of Northwest's intent to terminate the sub-leases on all 35 of the Avros.
"The combination of the loss of $30 million of revenue and the reduction in our fleet size by at least 28 percent has left us with no choice but to take this difficult step," Spanjers said. "We view bankruptcy as a last resort, but a necessary one because no other alternatives would allow us to change as rapidly as we need to."
"We worked hard to avoid Chapter 11, but we firmly believe this action affords us the best opportunity to restructure our finances and to be successful over the long run," Spanjers added. "We have valuable assets, including our dedicated employees who continue to focus on operating a safe, reliable airline. We plan to emerge from this Chapter 11 case as a lean and competitive regional carrier flying for Northwest or other major airlines."
MAIR Holdings, Mesaba's parent company, supports the airline's decision to pursue restructuring through the Chapter 11 process and has, in fact, offered to extend debtor-in-possession financing to Mesaba.
For further information regarding Mesaba's restructuring, visit www.mesaba-restructuring.com
Press Release
Source: Mesaba Aviation, Inc.
Mesaba Aviation Files for Chapter 11 Reorganization to Expedite Restructuring
Thursday October 13, 4:58 pm ET
Mesaba Will Continue Normal Operations
EAGAN, Minn.--(BUSINESS WIRE)--Oct. 13, 2005--Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings, Inc. (NASDAQ:MAIR - News), today announced it has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Minnesota.
The company emphasized that it will continue its regular operations to serve customers, honor tickets, and operate its schedule as a Northwest Airlink partner.
"This was a difficult but necessary step; Northwest's actions since filing bankruptcy along with the continuing distress affecting the entire industry requires us to change and to do so quickly," said John Spanjers, Mesaba Airlines president and chief operating officer. "The changes imposed on us by Northwest since its filing in September have left us with insufficient revenues to support our cost structure.
"This work will be invisible to our passengers," Spanjers continued. "As we go through this process, we will remain focused on delivering the highest levels of safety, reliability and service that our passengers have come to expect from us."
Prior to its filing, Northwest on September 12th failed to make a semi-monthly payment of approximately $18.5 million due to Mesaba under the Airline Services Agreement (ASA) for services rendered in the last half of August. On the following payment due dates of September 26 and October 11, Northwest made partial payments of $1.6 million and $15.7 million respectively. As a result, Mesaba has a net unsecured claim of approximately $30 million in the Northwest Chapter 11 case.
In addition, Northwest has advised Mesaba that it intends to reduce the number of Avro and Saab aircraft in Mesaba's fleet and that Mesaba should count on receiving only two of the fifteen new CRJ aircraft committed under the ASA. Further, Northwest also has notified Mesaba of Northwest's intent to terminate the sub-leases on all 35 of the Avros.
"The combination of the loss of $30 million of revenue and the reduction in our fleet size by at least 28 percent has left us with no choice but to take this difficult step," Spanjers said. "We view bankruptcy as a last resort, but a necessary one because no other alternatives would allow us to change as rapidly as we need to."
"We worked hard to avoid Chapter 11, but we firmly believe this action affords us the best opportunity to restructure our finances and to be successful over the long run," Spanjers added. "We have valuable assets, including our dedicated employees who continue to focus on operating a safe, reliable airline. We plan to emerge from this Chapter 11 case as a lean and competitive regional carrier flying for Northwest or other major airlines."
MAIR Holdings, Mesaba's parent company, supports the airline's decision to pursue restructuring through the Chapter 11 process and has, in fact, offered to extend debtor-in-possession financing to Mesaba.
For further information regarding Mesaba's restructuring, visit www.mesaba-restructuring.com