Mesaba Training Contract & Furlough

[oiltycoon]

I added up the numbers on the reduction notice.

880 total pilots present staffing

Proposed staffing: 771 pilots

77 captains displaced

32 FOs gone

109ish pilots axed... ????

(numbers don't include management/instructors)

About 117 were furloughed after 9/11.

 

[fly4ever]

JT8D,

I hate to burst yours and Steveair's bubbles but leases are not "pulled" under bankruptcy. With permission of the judge, which NWA has for the first 108 so far, the leases can be "rejected". This has the effect of allowing NWA to re-negotiate lease rates on whatever airplanes it wants to hang onto. Without this motion and grant by the judge the lease holder is under no obligation to negotiate better rates.

Most of these aircraft will continue to fly for NW under better rates and probably shorter terms. The current lease rates on many of these aircraft are 2-3 times the current market average because they were negotiated when the industry was making more money.

Sorry if you can't quite dance on our grave just yet.

 

[JT8D]

JT8D,

I hate to burst yours and Steveair's bubbles but leases are not "pulled" under bankruptcy. With permission of the judge, which NWA has for the first 108 so far, the leases can be "rejected". This has the effect of allowing NWA to re-negotiate lease rates on whatever airplanes it wants to hang onto. Without this motion and grant by the judge the lease holder is under no obligation to negotiate better rates.

N.Y. Bankruptcy Court Judge Says Northwest Airlines May Return Aircraft It Is Leasing


//http://abcnews.go.com/images/site/story/feature_txt_filler_ap.gifThe Associated Press


NEW YORK Oct 19, 2005 — A New York bankruptcy court judge on Wednesday said Northwest Airlines Corp. may return aircraft it is leasing but said the carrier has to give five days notice to the planes' owners.
Eagan, Minn.-based Northwest, the nation's fourth-largest carrier, filed for bankruptcy protection Sept. 14. Company executives have blamed skyrocketing fuel costs and competition from low-cost carriers for its insolvency.
Wednesday's order affects 108 planes, some of which are in use. The airline has filed a motion which requests approval to surrender another 100 aircraft.



The airline initially asked that it be allowed to offer three days notice of its intention to reject an aircraft's lease — the surrender of a plane. Companies leasing the craft had asked for notice of 10 days.

____________________________________________

fly4ever,

I have no desire to "dance on your grave".

However, "permission to return aircraft" does not sound the same as "re-negotiating a lease" as you suggest.

Sounds to me like NWA was given permission by the judge to return its leased aircraft to its owners with 5 days notice.

If you want to call that re-negotiating the lease, so be it.

 

[ultrarunner]

".......Wednesday's order affects 108 planes, some of which are in use. The airline has filed a motion which requests approval to surrender another 100 aircraft....."


So they basically want to be able to return about 200 planes?

That's a bunch of pilots.

 

[Yudso]

Following approval by the judge to reject the leases, Northwest may, if they so choose, ask the lease holders for better rates. If the lease holders cannot come to an agreement with NW, the aircraft will be returned. I doubt there is any market for these aircraft. The lessors are better off accepting a lesser rate, than to just sit on the planes. A similar situation happened between Airwis and United. United wanted to renegotiate the Airwis contract. Airwis refused. United dropped Airwis. The only difference here is that there is no mesa/gj's to lower the bar. I understand that there is a difference between a/c leases and air service agreements, but NWA's goal is the same. Lower costs or dump the costs. Pick your poison.

 

[fly4ever]

JT8D,

I appreciate your response but your understanding of the legal route that an entity must take in order to improve its financial picture is a little thin. I did state that they were given the right to "reject" the leases but there is far more to it than just that statement.

Bankruptcies always start out with standard motions which enable the company to reduce its payout. It doesn't matter which industry you're talking about.

Lease charges and length of term are the two biggest issues facing NWA right now and if they were to going to reduce their fleet you would have seen lease holders for 108 airplanes already get their 5-day notice. It may happen to some of the planes but it won't happen to 208. NWA will not take the chance on losing such a huge part of their market share by shrinking their fleet overnight.

Lease holders will be dealing with NWA (probably already are) so that they don't have to hold the bag on a bunch of airplanes with limited options for placing them. NWA will negotiate better rates and shorter terms for the purpose of being able to park aircraft as new and more efficient aircraft are brought on board.

 

[JT8D]

JT8D,

I appreciate your response but your understanding of the legal route that an entity must take in order to improve its financial picture is a little thin. I did state that they were given the right to "reject" the leases but there is far more to it than just that statement.

Bankruptcies always start out with standard motions which enable the company to reduce its payout. It doesn't matter which industry you're talking about.

Lease charges and length of term are the two biggest issues facing NW right now and if they were to going to reduce their fleet you would have seen lease holders for 108 airplanes already get their 5-day notice. It may happen to some of the planes but it won't happen to 208. NWA will not take the chance on losing such a huge part of their market share by shrinking their fleet overnight.

Lease holders will be dealing with NWA (probably already are) so that they don't have to hold the bag on a bunch of airplanes with limited options for placing them. NWA will negotiate better rates and shorter terms for the purpose of being able to park aircraft as new and more efficient aircraft are brought on board.

I understand everything you have stated.

My original post was in response to Napoleon TNT's question of "how do you pull a lease?"

At this point we are engaging in semantics.

Call it "pulled", "rejected", "re-negotiated" or flubber for all I care. What it MEANS is the BK judge threw the leases out the window and for all practical purposes they do not exist anymore.

Now if NW is doing it for negotiating the leases, great.

But, NW is now in the drivers seat with the aircraft's owners.

 

[fly4ever]

And that we definitely can agree on.

 

[Ace McCoy]

Don't forget NWA leases the planes from the bank and then sub leases them to Mesaba. So it was NWA that announced they were pulling the sub lease contract from Mesaba. Then they got permission from the judge to get rid of the lease from the bank.

They are two separate issues. Sure NWA may be in violation of the ASA by pulling the sub lease on Dec. 20 but what is Spangebob Jinglepants gonna do? Nothing that will upset his overlord masters that's for sure.

And yes we are furloughing 100+ guys and it sucks.

 

[captpetefam]

That's it?

And yes we are furloughing 100+ guys and it sucks.

100+?!? That's it? If the current senario comes true, we're furloughing about 790 pilots. Now THAT Sucks!

Cya,

CP