Victor Meldrew
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- Jul 7, 2005
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Dec 19, 2005 (Regional Aviation News/Access Intelligence via COMTEX) --
Bankrupt Northwest Airlines [NWACQ] has asked Pinnacle Airlines [PNCL] and
Mesaba Aviation [MAIR] to bid on a new air service contract to fly the 124
regional jets now flown by Pinnacle.
It is unclear if the two AirLink code-share partners are competing between
themselves for an all-for-one package, or if other regional carriers also
have a chance to submit bids to Northwest. Northwest will not comment on its request for proposals and neither Mesaba nor Pinnacle are aware other potential competitors for the contract.
At the same time, a spokesman for Northwest's pilots said that his union
believes Northwest has issued an open call to any regional to submit a
bid.
Prior to Northwest's September bankruptcy filing, Pinnacle had been flying
139 Bombardier [BBD] CRJ 200s. Northwest grounded 15 airplanes in October and has subsequently decided to return these planes to their leaseholders. Mesaba in October began to fly its first two CRJ 200s with expectations that it would be flying a total of 15 50-seat RJs by spring. Due to its bankruptcy filing, Northwest never took delivery of any additional CRJ 200s that were due to be delivered.
Mesaba's fleet of Avro RJ85s and Saab 340s remains an open question.
Northwest has told the bankruptcy court that it may return all but 14 of 49 total Saabs and the two Mesaba CRJ 200s. The Northwest solicitation does not mention Mesaba's aircraft.
According to both Pinnacle and Mesaba, Northwest wants its next Airlink
partner to fly RJs carrying up to 76 passengers. However, Northwest lacks the
authority to contract for that task. It has yet to secure a concession from the Northwest chapter of the Air Line Pilots Association (ALPA) that would relax the scope clause rules.
"Fifty-five seats is the current ceiling," said Will Holman, spokesman for
Northwest ALPA. "For the regionals to fly a 76-seat plane, Northwest ALPA
needs to agree to the changes."
In early November, the Northwest pilots' union agreed to an interim 23.9
percent salary cut while the union and carrier continue to negotiate a new
contract. There were no changes to scope limits in that interim agreement, Holman said. "Northwest management still want them, but the Northwest pilots are not interested in giving any scope away." If a permanent pact with Northwest is not reached by Jan. 17, the carrier will ask the court to impose new contract terms.
As Pinnacle and Mesaba prepare to submit bids for the flying contract,
each has taken a different approach.
Mesaba
Pushed into bankruptcy by Northwest's refusal to pay for flights made
before its September bankruptcy filing, Mesaba has begun negotiating with four unionized employee groups to obtain an effective 19.4 percent salary reduction. The carrier will impose a similar cut on its non-unionized hourly workers and its salaried employees. The wage reductions, benefits adjustments and work rule changes are to be effective April 1, 2006, said spokeswoman Elizabeth Costello.
Mesaba's pilots are negotiating with the carrier, but they have yet to be
convinced that significant pay cuts are necessary, said Tom Wychor,
chairman of the Mesaba ALPA unit. After reviewing financial documents for both Mesaba and its parent, MAIR Holdings [MAIR], Wychor said, "the data is incomplete and inconclusive that any concessions are warranted.
"We believe that based on the information that we have seen that Mesaba is
in a different situation than the other carriers. It is not a true bankruptcy.
It is a corporate shell game transferring funds from Mesaba to MAIR."
Mesaba's proposal to the pilots calls for a 17 percent salary cut for Avro
captains, a 17 percent cut for Saab captains and 13 percent cut for CRJ
captains. The pact also proposes to cut first officers' salaries by 17
percent.
The proposal wipes out any gains that were achieved in 2004, when the
pilots nearly struck the airline. "This puts us well below the bottom of the
scale," Wychor noted.
It is the salary proposal for first officers that Wychor finds most
offensive.
Six years from now - 2012 - a first officer will earn $10,300 after health
insurance premiums are deducted from the salary. "These are Wal-Mart wages and utterly unacceptable. It forces these pilots to turn to food stamps and government-funded health care," he said.
The pilot's union questions the Mesaba-MAIR relationship. Mesaba retains
very little of its revenue and it provides 95 percent of MAIR's revenue. The
holding company has a cash balance of about $120 million.
Mesaba's bankruptcy judge will hold a hearing on Jan. 10 to consider a
request from the Mesaba creditors' committee to subpoena MAIR's financial
documents as well as interview MAIR CEO Paul Foley and CFO Robert E. Weil.
ALPA also questions the payroll for the MAIR hierarchy, which has little
daily operational involvement in either Mesaba or its sister carrier, Big Sky
Airlines. "MAIR's payroll is the main expense," he said.
Foley in 2004 was paid $776,756 compared to $500,393 paid to Pinnacle CEO Philip Trenary or the $686,284 paid to Northwest CEO Douglas Steenland. Wychor notes that Foley was paid more than Herb Kelleher, the chairman of profitable Southwest Airlines [LUV]. Kelleher was paid $710,014.
Pinnacle
As Pinnacle prepares to respond with a bid for a new contract, it most
likely will not seek wage concessions from its employees, said Philip Reed, the
company spokesman.
"Pinnacle in the past has never gone to its employees and asked for
concessionary wages," Reed said. "Frankly, I don't expect to do so in the
current environment. It doesn't mean we might not ask for enhanced
productivity or contract work rule changes."
"I don't know of anyone who can perform this mission [for Northwest]
better than we have. Without fail, we have developed the lowest costs per block hour delivered in the industry," Reed said.
Contacts: Elizabeth Costello, Mesaba, (651) 367-5264; Tom Wychor, Mesaba
ALPA, (952) 851-9411; Will Holman, Northwest ALPA, (952) 853-2311; Philip Reed, Pinnacle, (901) 348-4257.
AirLink Partners In Line With Peers
Carrier Most Recent CASM 1st Year 50-seat RJ Hourly rate
Mesaba $0.15 $55
Pinnacle $0.13 $55
Mesa $0.12 $52
Republic $0.12 $54
SkyWest $0.14 $56
Source: Company reports,Airlinepilotcentral.com
Regional Aviation News, Vol. 23, No. 48
Source: Comtex Wall Street News
Bankrupt Northwest Airlines [NWACQ] has asked Pinnacle Airlines [PNCL] and
Mesaba Aviation [MAIR] to bid on a new air service contract to fly the 124
regional jets now flown by Pinnacle.
It is unclear if the two AirLink code-share partners are competing between
themselves for an all-for-one package, or if other regional carriers also
have a chance to submit bids to Northwest. Northwest will not comment on its request for proposals and neither Mesaba nor Pinnacle are aware other potential competitors for the contract.
At the same time, a spokesman for Northwest's pilots said that his union
believes Northwest has issued an open call to any regional to submit a
bid.
Prior to Northwest's September bankruptcy filing, Pinnacle had been flying
139 Bombardier [BBD] CRJ 200s. Northwest grounded 15 airplanes in October and has subsequently decided to return these planes to their leaseholders. Mesaba in October began to fly its first two CRJ 200s with expectations that it would be flying a total of 15 50-seat RJs by spring. Due to its bankruptcy filing, Northwest never took delivery of any additional CRJ 200s that were due to be delivered.
Mesaba's fleet of Avro RJ85s and Saab 340s remains an open question.
Northwest has told the bankruptcy court that it may return all but 14 of 49 total Saabs and the two Mesaba CRJ 200s. The Northwest solicitation does not mention Mesaba's aircraft.
According to both Pinnacle and Mesaba, Northwest wants its next Airlink
partner to fly RJs carrying up to 76 passengers. However, Northwest lacks the
authority to contract for that task. It has yet to secure a concession from the Northwest chapter of the Air Line Pilots Association (ALPA) that would relax the scope clause rules.
"Fifty-five seats is the current ceiling," said Will Holman, spokesman for
Northwest ALPA. "For the regionals to fly a 76-seat plane, Northwest ALPA
needs to agree to the changes."
In early November, the Northwest pilots' union agreed to an interim 23.9
percent salary cut while the union and carrier continue to negotiate a new
contract. There were no changes to scope limits in that interim agreement, Holman said. "Northwest management still want them, but the Northwest pilots are not interested in giving any scope away." If a permanent pact with Northwest is not reached by Jan. 17, the carrier will ask the court to impose new contract terms.
As Pinnacle and Mesaba prepare to submit bids for the flying contract,
each has taken a different approach.
Mesaba
Pushed into bankruptcy by Northwest's refusal to pay for flights made
before its September bankruptcy filing, Mesaba has begun negotiating with four unionized employee groups to obtain an effective 19.4 percent salary reduction. The carrier will impose a similar cut on its non-unionized hourly workers and its salaried employees. The wage reductions, benefits adjustments and work rule changes are to be effective April 1, 2006, said spokeswoman Elizabeth Costello.
Mesaba's pilots are negotiating with the carrier, but they have yet to be
convinced that significant pay cuts are necessary, said Tom Wychor,
chairman of the Mesaba ALPA unit. After reviewing financial documents for both Mesaba and its parent, MAIR Holdings [MAIR], Wychor said, "the data is incomplete and inconclusive that any concessions are warranted.
"We believe that based on the information that we have seen that Mesaba is
in a different situation than the other carriers. It is not a true bankruptcy.
It is a corporate shell game transferring funds from Mesaba to MAIR."
Mesaba's proposal to the pilots calls for a 17 percent salary cut for Avro
captains, a 17 percent cut for Saab captains and 13 percent cut for CRJ
captains. The pact also proposes to cut first officers' salaries by 17
percent.
The proposal wipes out any gains that were achieved in 2004, when the
pilots nearly struck the airline. "This puts us well below the bottom of the
scale," Wychor noted.
It is the salary proposal for first officers that Wychor finds most
offensive.
Six years from now - 2012 - a first officer will earn $10,300 after health
insurance premiums are deducted from the salary. "These are Wal-Mart wages and utterly unacceptable. It forces these pilots to turn to food stamps and government-funded health care," he said.
The pilot's union questions the Mesaba-MAIR relationship. Mesaba retains
very little of its revenue and it provides 95 percent of MAIR's revenue. The
holding company has a cash balance of about $120 million.
Mesaba's bankruptcy judge will hold a hearing on Jan. 10 to consider a
request from the Mesaba creditors' committee to subpoena MAIR's financial
documents as well as interview MAIR CEO Paul Foley and CFO Robert E. Weil.
ALPA also questions the payroll for the MAIR hierarchy, which has little
daily operational involvement in either Mesaba or its sister carrier, Big Sky
Airlines. "MAIR's payroll is the main expense," he said.
Foley in 2004 was paid $776,756 compared to $500,393 paid to Pinnacle CEO Philip Trenary or the $686,284 paid to Northwest CEO Douglas Steenland. Wychor notes that Foley was paid more than Herb Kelleher, the chairman of profitable Southwest Airlines [LUV]. Kelleher was paid $710,014.
Pinnacle
As Pinnacle prepares to respond with a bid for a new contract, it most
likely will not seek wage concessions from its employees, said Philip Reed, the
company spokesman.
"Pinnacle in the past has never gone to its employees and asked for
concessionary wages," Reed said. "Frankly, I don't expect to do so in the
current environment. It doesn't mean we might not ask for enhanced
productivity or contract work rule changes."
"I don't know of anyone who can perform this mission [for Northwest]
better than we have. Without fail, we have developed the lowest costs per block hour delivered in the industry," Reed said.
Contacts: Elizabeth Costello, Mesaba, (651) 367-5264; Tom Wychor, Mesaba
ALPA, (952) 851-9411; Will Holman, Northwest ALPA, (952) 853-2311; Philip Reed, Pinnacle, (901) 348-4257.
AirLink Partners In Line With Peers
Carrier Most Recent CASM 1st Year 50-seat RJ Hourly rate
Mesaba $0.15 $55
Pinnacle $0.13 $55
Mesa $0.12 $52
Republic $0.12 $54
SkyWest $0.14 $56
Source: Company reports,Airlinepilotcentral.com
Regional Aviation News, Vol. 23, No. 48
Source: Comtex Wall Street News
