DoinTime said:
ERJPusher...Your post was seriously misguided and unfactual. I would recomend you do some homework before you settle back in that easy chair and come up with your version of "how it all got started."
Firstly, my apologies to Pinnacle pilots for the last statement in my previous post. My point was not to bash you guys at Pinnacle, but instead to emphasize the fact that some things are out of everyone's control. Of course Pinnacle can't deny flying that comes their way. In the same sense, Mesaba can't control how many planes Pinnacle gets, or what kind of contract Pinnacle signs. I agree with an above post that the majority of "Airlinkers" are great people and seem to get along quite well. My post was directed at those on this board who feel the need to take it upon themselves to try and dictate what occurs at a company they don't even work at. I definitely should have used a little more tact.
DoinTime,
Feel free to enlighten me on whatever information you have on this subject. I always want to learn.
My statements were based on numerous articles and point-blank media statements from NWA management over the last 3 years, but I would be glad to know what you have to say.
In the meantime, here's a couple articles I dug up for you to browse through...
...FROM STAR TRIBUNE, January 2004
Mesaba Airlines has been ferrying passengers from small cities throughout the Upper Midwest to Northwest Airlines' hub airports in the Twin Cities and Detroit since 1984, and in 2000 Northwest said it wanted to buy the remaining stock of Mesaba that it didn't already own.
But all that changed when pilots at another regional carrier, Comair, went on strike in March 2001.
That strike lasted three months, shut down Cincinnati's airport and cost Comair's owner, Delta Air Lines, an estimated $200 million in lost profits. In the end, Comair's pilots won a contract that included immediate pay raises of 13 to 15 percent, making them the highest-paid in the regional jet industry.
That victory by the pilots forced other major airlines to reevaluate their relationships with the regional airlines, which had become critical to their growth. No longer were big carriers willing to rely on one regional airline at any of their hubs. And owning regional carriers, viewed as the best way to exert operational control through the '90s, suddenly became a liability as labor unions at the small carriers began flexing their muscles.
Northwest, which gets an estimated $1 billion in revenue from its regional partners, dropped its bid to acquire the remaining shares of Mesaba in the wake of the Comair strike, and has since shifted a larger portion of its flying to Pinnacle Airlines, another regional carrier that it owned until last year.
That has left Mesaba's pilots with far less leverage than they had three years ago.
"The major carriers learned that, by putting all their eggs in one basket, they put themselves at peril in the event of a strike," said Douglas Abbey, president of AvStat, a Washington, D.C., firm that closely follows the small-jet market. "Owning them also meant that the unions had deep pockets they could go after."
That resolve only hardened as the worst economic slump in the history of the aviation industry pushed two major carriers, United Air Lines and US Airways, into bankruptcy and caused each to renegotiate contracts that allowed regional partners to make money even as the big airlines lost billions.
"The contracts had become so rich and so risk-free for the regional airlines," said Robert Mann, president of the New York-based consulting firm R.W. Mann & Co.
A key to new markets
Regional jets remain vital to the future of the airline industry. The smaller planes flown by lower-paid pilots allow big airlines to enter new markets with less risk and also afford a lower-cost way to maintain a presence if demand weakens or competition increases. In the wake of the terrorist attacks of 9/11, more Americans than ever -- an estimated one in six -- now fly on a regional airline.
But the generous contracts that governed the relationship between the big company and small company, contracts that guaranteed profit margins in some cases of 12 percent and 14 percent, are a thing of the past. Growth of lower-cost, independent regional carriers such as Mesa and Skywest has only added to the pressure at small carriers such as Mesaba, which is partly owned by Northwest.
Northwest hasn't been at the bargaining table with Mesaba's pilots, but it didn't need to be. It provides all of Mesaba's planes, customers and revenue.
In the two years since the Comair strike ended, Northwest studiously built up the operations of Pinnacle Airlines, a Memphis-based regional partner that it owned until last year. It has allocated all of its sleek new 50-seat Canadair jets, as well as most of the new regional service out of the Twin Cities and Detroit, to Pinnacle.
In July 2001, Northwest began assigning to Pinnacle routes out of Detroit and the Twin Cites that once were the exclusive domain of Mesaba. Pinnacle now flies 162 daily departures from those two hubs, versus 62 from its home base of Memphis.
Other airlines have done the same. Delta still owns Comair, but Atlantic Coast Airlines now does a lot of contractual flying for Delta out of Cincinnati. Last year US Airways, which owns regional carriers Allegheny and PSA, shifted some routes to Mesa and last week said it may sell its regional operations.
Mesaba pilots have accused Northwest of pitting its pilot group against Pinnacle's, an argument that George Hopkins, the author of three books on pilot unions and a history professor at Western Illinois University in Macomb, Ill., sympathizes with.
"They [Northwest] are whipsawing the hell out of" Mesaba's pilots, Hopkins said.
But industry consultant Mann said the big airlines are doing what they have to do to survive -- squeezing costs wherever they can.
"In light of what went on with Comair, it's really just a diversification strategy," Mann said. "Let's be honest. Management can't put itself in a position where it can be held hostage."
...FROM CNBC MONEYCENTRAL, June 2001
Mesaba Holdings, Inc. confirmed that Northwest Airlines has withdrawn the proposal it made last November to acquire the shares of Mesaba stock that it does not already own. Northwest said in its news release that they look forward to the possibility of expanding their relationship with Mesaba, and that the reasons to terminate discussions are related to recent developments in the regional airline industry which caused them to re-evaluate their ownership relationships with the regional airlines with which they have service agreements.
-Bean
