Nice comment from FOOLEY in the paper today. and this was in reference to pilots and flight attendants!
But Foley said that lower wages are a reality in the airline industry. "There are more than enough people willing to work at the work rules and wage rates that Mesaba has proposed," Foley said.
This next part is encouraging . I think mesaba and MAIR may have bit off more then they can chew. Go get em Tom !!!
Meanwhile, the creditors committee in the Mesaba bankruptcy wants to probe financial connections between Mesaba and its parent, MAIR Holdings, which is not in bankruptcy. The key creditors, including aviation companies and Mesaba pilots and flight attendants unions, have asked the judge to let them subpoena Foley and other top MAIR executives.
"For years, the Mesaba pilots have been extremely concerned about the uplifting of cash from our company to a separate suite of executives" at Minneapolis-based MAIR, said Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association (ALPA).
Now the creditors have united in seeking more information about the financial relationship between MAIR and Mesaba. Minnesota Twins owner Carl Pohlad serves as chairman of the MAIR board of directors. All of MAIR's profit has been generated by its main subsidiary, Mesaba, because tiny Big Sky Airlines, its other subsidiary, has lost money since it was acquired in 2002, Wychor said.
Here is the entire artical:
Liz Fedor, Star Tribune Last update: December 8, 2005 at 8:22 PM
Bankrupt Mesaba Airlines is attempting to slash its labor costs by 19 percent, the head of Mesaba's parent company said Thursday during an airline conference in New York.
Paul Foley, CEO of MAIR Holdings, said Mesaba must reduce its labor rates to continue providing regional flight service for Northwest, which filed for bankruptcy in September. But he stressed that Mesaba also must have a competitive cost structure to attract flying business beyond Northwest.
Meanwhile, the creditors committee in the Mesaba bankruptcy wants to probe financial connections between Mesaba and its parent, MAIR Holdings, which is not in bankruptcy. The key creditors, including aviation companies and Mesaba pilots and flight attendants unions, have asked the judge to let them subpoena Foley and other top MAIR executives.
"For years, the Mesaba pilots have been extremely concerned about the uplifting of cash from our company to a separate suite of executives" at Minneapolis-based MAIR, said Tom Wychor, chairman of the Mesaba branch of the Air Line Pilots Association (ALPA).
Now the creditors have united in seeking more information about the financial relationship between MAIR and Mesaba. Minnesota Twins owner Carl Pohlad serves as chairman of the MAIR board of directors. All of MAIR's profit has been generated by its main subsidiary, Mesaba, because tiny Big Sky Airlines, its other subsidiary, has lost money since it was acquired in 2002, Wychor said.
Foley, during an investors conference, said MAIR has "over $115 million in cash and investments" and "minimal long-term debt." He emphasized that MAIR did not file for bankruptcy but has offered to provide up to $35 million of debtor-in-possession financing to Mesaba.
Wychor argues that MAIR and Mesaba are for all practical purposes one entity, and that the MAIR executives are "playing a shell game."
The Mesaba creditors committee, which wants to recover payments from Mesaba, has formally asked the court to compel MAIR to turn over a massive array of MAIR documents. A hearing on the creditors' motion is scheduled for Jan. 10.
"We will certainly comply with any direction from the court," MAIR spokesman Jon Austin said Thursday. "I think we'd certainly participate in the discussion on the motion, so the creditors committee gets the information it needs without imposing an undue hardship on the company."
Pay cuts looming
Mesaba employees are worried about financial hardships heading their way.
Pilots who fly Mesaba's three plane types are being asked to take 13 to 19 percent pay cuts. Wychor said he has not seen any financial data to justify any level of cutbacks for pilots or other Mesaba employees.
But Foley said that lower wages are a reality in the airline industry. "There are more than enough people willing to work at the work rules and wage rates that Mesaba has proposed," Foley said.
Union negotiators have been told that Mesaba wants to negotiate concessionary agreements by Dec. 19, Wychor said. If that goal is not reached, Wychor said the company is expected to file a motion in bankruptcy court seeking to abrogate its labor contracts.
The other unions at Mesaba are the Association of Flight Attendants, the Aircraft Mechanics Fraternal Association and the Transport Workers Union.
"All employees will bear their share of the burden," Mesaba spokeswoman Elizabeth Costello said.
"The keys for a successful Mesaba reorganization are securing our core business with Northwest, making Mesaba an attractive partner to Northwest for growth opportunities -- whether that is a 50- or 70-seat regional jet -- and a cost structure that allows us to diversify," Costello said.
On Thursday, Foley broached the subject of MAIR or Mesaba acquiring airplanes for non-Northwest flying, but he didn't provide specifics.
Currently, he said, "Northwest is dictating to us what the fleet will be." Northwest has taken nine Avro jets out of Mesaba's schedule and 10 Saab turboprops are expected to be removed next month.
Liz Fedor • 612-673-7709
