Judge Nixes Mesaba Plan to End Contracts
By Sandra Arnoult, ATW online | May 22, 2006
A US Bankruptcy Court judge sided with Mesaba Airlines pilots and flight attendants last week, denying management the right to cancel existing labor contracts.The carrier, which operates as a Northwest Airlink partner, wants a 19.4% reduction in labor costs over the next six years to ensure financial viability. In February it filed documents with the court seeking approval to cancel its labor contracts with pilots, flight attendants and mechanics and cut 1,600 jobs.
However, union leaders threatened a work stoppage if the proposals are implemented (ATWOnline, May 9). "The only way that this company, our airline, is going to survive and prosper is through consensual agreement between management and its labor groups," said Tom Wychor, chairman of Mesaba's Air Line Pilots Assn. unit.
Mesaba officials claimed some vindication by noting that the judge accepted the company's "core business assumptions" regarding the need to reduce costs drastically. The airline said its motion was denied because it failed to provide a "working financial model to the unions and its modeling of workforce attrition." The judge also stated that if the unions do not recognize Mesaba's financial difficulties, it can re-file its motion.
The decision parallels one last month in which a bankruptcy judge ruled that Comair, a Regional subsidiary of Delta Air Lines, could not cancel its labor contract with its flight attendants and ordered both sides back to the bargaining table (ATWOnline, April 28).