Regional Carrier Would Become Wholly Owned Subsidiary
Northwest's board of directors plan
a vote next Wednesday on a deal to acquire regional carrier Mesaba.
Mesaba's creditors filed a motion in bankruptcy court supporting
Northwest's purchase offer.
Both airlines have been under bankruptcy protection for over a
year with Mesaba primarily pushed there by Northwest's failure to
Northwest's offer of $155 million pays off Mesaba's claim
against Northwest, plus a cool $10 million. Northwest says the
purchase will secure Mesaba's future by locking in current flight
operations and positioning the regional carrier for growth.
And that's not all Northwest is offering.
If the deal goes through, Northwest will contract with Mesaba to
keep flying its 49 Saab turboprops. But Northwest has ordered 36
Canadair Regional Jets (CRJ) seating 76 passengers each.
Northwest's senior vice president for finance David Davis sent a
letter asking Mesaba to file its plan of reorganization by January
15 and speed the sale along. His letter hinted the CRJs might go to
Mesaba should the purchase deal get fast-tracked as Northwest would
Adding the CRJs would return Mesaba's fleet to the same size it
was before Northwest decommissioned 35 older Avro jets after
So far, Mesaba's owner, MAIR Holdings Inc., hasn't commented on
Northwest's offer. According to court papers filed by Mesaba's
creditors, the regional carrier's management recommended MAIR
accept the deal.
"We are disappointed that the current equity holder, MAIR
Holdings, has not expressed support for the transaction," Northwest
spokesman Bill Mellon told the Minneapolis Star Tribune
In their court filing, Mesaba's creditors said they, "do not
have the luxury of waiting until MAIR and its shareholders approve
or disapprove of the Northwest transaction."
Mesaba's creditors await judgment on a motion which would allow
them to file a reorganization plan on behalf of Mesaba -- the
airline holds that exclusive right until mid-February. A judgement
in their favor would allow Mesaba's creditors to meet Northwest's
deadline and prevent MAIR from blocking the sale. A ruling is
expected next Tuesday.