Things get wierder: Mesaba Buys Big Sky

[altimaklr]

Mesaba Holdings Agrees to Acquire Big Sky
Big Sky Will Become a New Subsidiary
Thursday September 26, 8:16 pm ET


MINNEAPOLIS & ST. PAUL, Minn.--(BUSINESS WIRE)--Sept. 26, 2002--Mesaba Holdings, Inc. (Nasdaq:MAIR - News) and Big Sky Transportation Co. today jointly announced an agreement under which Mesaba Holdings will acquire Big Sky, a Billings, Montana-based regional air carrier, for $2.60 per share, totaling approximately $3.5 million.
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Mesaba Holdings will offer to purchase all outstanding Big Sky common stock in cash, pursuant to a tender offer expected to commence in approximately three weeks, assuming the satisfaction of certain conditions.

Mesaba Holdings plans to operate Big Sky as a wholly owned subsidiary. Big Sky will be separate from Mesaba Holdings' existing subsidiary, Mesaba Aviation, Inc. Mesaba Holdings expects the transaction to be neutral to earnings in FY2003 and slightly accretive in FY2004.

"Mesaba Holdings' goal is to profitably expand our business activities both within the framework of our existing operations at Mesaba Airlines and in new areas of opportunity," said Paul Foley, Mesaba Holdings president and chief executive officer. "Big Sky is a good example of the type of opportunity we are seeking. It is an efficiently run company with an excellent safety record and a cost structure that positions it well in the highly competitive regional airline marketplace."

"This transaction is good for our shareholders, our employees and the communities we serve," said Jon Marchi, chairman of Big Sky's board of directors. "We are delighted to be joining Mesaba Holdings."

"Mesaba Holdings' leadership, financial strength and knowledge of the industry will provide opportunities for our employees, by helping us continue to grow in these challenging times," said Kim Champney, Big Sky president and CEO.

Mesaba Holdings will commence the tender offer after Big Sky has satisfied certain labor conditions. Completion of the acquisition will require the tender of at least two-thirds of all outstanding Big Sky shares, on a fully diluted basis, assuming the exercise of all outstanding stock options.

Mesaba Holdings' primary business is the regional airline subsidiary Mesaba Aviation, Inc., d/b/a Mesaba Airlines. Mesaba Airlines operates as a Northwest Jet Airlink and Airlink partner under service agreements with Northwest Airlines. Currently, the airline serves 106 cities in 24 states and Canada from Northwest's and Mesaba's three major hubs, Detroit, Minneapolis/St. Paul, and Memphis. Mesaba operates an advanced fleet of regional jet and jet-prop aircraft, consisting of the 69 passenger Avro RJ85 and the 30-34 passenger Saab SF340.

More information about Mesaba Airlines is available on the Internet at www.mesaba.com.

 

[Beechnut]

Doh! Look where the next Airlink RJ's are going!

S.

 

[saabtrash]

Beechnut,

Are you saying that they're going to go to BigSky? Just curious what your thoughts are....

 

[ryangm]

The RJ's will go to the cheapest labor....ie Non-unionized Bigsky.

 

[Beechnut]

Yeah, just a guess. I have no claim to knowledge on this, but sure does seem good for Foley.

I can buy a company, but I can't afford that durn pilot contract!


Hang in there XJ, we're pullen for you.

S.

 

[sydeseet]

I'm curious as to how Foley plans to merge the pilot groups. Upgrades at XJ have stopped, they're furloughing again, and mediated talks are about to start. I realize that Big Sky pilots are entitled to fairness too, but this could be very hurtful to a lot of Mesaba pilots. Being slapped in the face is one thing, but to be blind-sided with a crow-bar is a whole different event. This could get interesting.

 

[Beechnut]

Do the pilot groups have to be joined? I'll bet BigSky gets those shiney new RJ's much like Freedom Air will. THAT IS WHERE THE LIKENESS ENDS. I don't want to see some jerk off start calling BigSky the next scab airline that Freedom is. If you can't tell the difference, go research this board. I think it's a clever managment tool used to control the pilot groups.

S.

 

[Guam360]

talking about weird, what about AirTran and Air wisconson????
WOW!

 

[DoinTime]

I can see it now.....there is going to be BS all over the sides of our nice new airplanes.

 

[avbug]

I wouldn't worry about RJ's becoming the next mount for Big Sky's drivers. The airplane isn't really appropriate for much of the market served by Big Sky...which does a lot of EAS work right now.

This isn't anything new; it's the same evoloution that takes place on a regular cycle, as small operators get picked up by bigger operators.

 

[altimaklr]

On the flipside, I wonder if BS pilots will get booted and replaced by furloughed Mesaba pilots... and will the pilot groups be integrated?


-Sean

 

[JJJ]

Mesaba Holdings plans to operate Big Sky as a wholly owned subsidiary. Big Sky will be separate from Mesaba Holdings' existing subsidiary, Mesaba Aviation, Inc.

If Big Sky will be a wholly owned subsidiary, won't the seniority lists be seperate? Pinnacle is a wholly owned subsidiary if NWA, but obviously our seniority lists are seperate.

I don't think Mesaba or Pinnacle pilots have anything to worrr\y about.

 

[Simon Says]

We have everything to worry about. Big Sky and Mesaba will have seperate senority lists. Northwest only has to give Mesaba so much flying. They do not have to give us growth.

Big Sky will get the CRJ's because of cheap labor. No one can tell me that a young CFI wont go fly a CRJ for $10.00 an hour. Mesaba airlines will be shrunk down to nothing until Pinnacles next contract. Then Mesaba will be able to slowly recover.

 

[ksu_aviator]

We'll be lucky to see Mesaba Aviation in the future. I'd bet anything that Big Sky will set up shop in MSP, DTW and MEM with those CRJ's and push XJ right out of the picture. Without some great legal ranglin' by ALPA I'd say that XJ is finished.

 

[Freight Dog]

If they don't merge the seniority lists, there will be problems.. I can see that already.

 

[Beechnut]

And so it begins. Remember when Eagle and Mesaba were the place to go? Ooof!



ALPA Leaders Strongly Oppose Mesaba Holdings' Formation of Big Sky Airlines as an Alter-Ego Carrier
Friday September 27, 6:01 pm ET


MINNEAPOLIS, Sept. 27 /PRNewswire/ -- Leaders of the Air Line Pilots Association (ALPA) contacted Mesaba management Friday to voice their displeasure at the company's intention to use the purchase of Big Sky Airlines as negotiating leverage during contract negotiations. Mesaba Airlines flies as a Northwest Airlink.




"The company promised this pilot group that Mesaba pilots would be used to grow the airline. Instead, our pilots are being laid off while management uses profits from our pilots' hard work to purchase a new carrier," said Captain Tom Wychor, chairman of Mesaba Airlines ALPA unit. "This is clearly designed to hurt our current negotiations and is devastating employee morale."

The union leadership tried to set up a meeting with Mesaba management to discuss this issue, but the company has refused to meet.

Mesaba pilots have been in contract negotiations for sixteen months, and the pilot union leadership sees this latest purchase as management's way of giving the pilot group a choice -- an inadequate contract or no jobs.

"This is another horrible example of a company punishing its employees and forgetting that it was the employees who sacrificed and made the company profitable," said Captain Duane Woerth, ALPA President. "Taking jobs away from the Mesaba pilots after they agreed on a concessionary contract in '96 to help Mesaba become profitable is just plain wrong."

Woerth went on to say, "This is a very dangerous trend in our industry and ALPA will use all appropriate means, including financial, legal, communications and other resources to end this whipsawing tactic."

Captain Wakefield Gordon, chairman of Pinnacle Airlines ALPA unit, another Northwest Airlink, said, "The Pinnacle pilots have been down this road and our management, like the Big Sky management, enticed us to enter a long term contract in exchange for growth. Now we are saddled with mediocre wages, parsimonious retirement and antiquated work rules. Northwest already has two first-class feeders, so the only possible reason for this transaction is to play one carrier against another."

The union leaders believe Mesaba CEO Paul Foley may use Big Sky to divert work from Mesaba as a form of leverage during contract negotiations. The Mesaba pilots have been working under a concessionary contract since 1996 and have been in negotiations for a new contract since June of 2001.

"This is a classic case of whipsawing one pilot group against another. Using another pilot group as leverage is not only an attack on Mesaba pilots, but also on the piloting profession," said Captain Mark McClain, chairman of Northwest Airlines ALPA unit. "Northwest pilots support Mesaba pilots and will help resist attempts at whipsawing pilot groups in the Northwest family."

The purchase of Big Sky is reminiscent of the Air Tran spinoff in '93. In a similar situation, the company decided to expand by creating a separate company with profits earned by Mesaba. Management then used its resources on the growth of Air Tran and neglected Mesaba Aviation. It was not until the pilots took a concessionary agreement in '96, that Mesaba began substantial and sustained growth and profitability.

Founded in 1931, ALPA is the world's oldest and largest pilot union, representing more than 66,000 pilots at 43 airlines in the U.S. and Canada, including 950 Mesaba Airlines pilots. Visit the ALPA Website at http://www.alpa.org .

 

[T-handle]

Well I hope ol' Gordy Newstrom, founder of Mesaba Aviation way back in 1944, gets out of his wheelchair, at 90 years young today, and kicks the ever loving sh!t out of Foley! He freakin stole our GD money and is going to strip us to nothing.

 

[sf3boy]

According to the high ups in ALPA, the management at Mesaba will not even entertain dialogue in the matter of the purchase of Big Sky. The Mesaba pilots were told that it is none of their concern what Mesaba Holdings does with Big Sky. Just another deal like Air Tran where Mesaba employee earned money goes to reward some employee group(s) that had nothing to do with earning it. Anyone know of a regional that is hiring 3 and 4 year plus FO's?

 

[Beechnut]

Air Wisconsin

C'mon over, we have our share of Mesaba folks.

S.

 

[Simon Says]

I cannot believe I am entertaining the thought of jumping ship with 4 years of senority at a regional airline. Mesaba is turning into a Mesa with the union busting tactics involved.