Disappearing from Radar?

As NWA and Mesaba play chicken in bankruptcy court, the future of the regional carrier looks bleak

That's not the case now. Mesaba has plenty of pilots who have made it to the top of the union seniority list with 18 years of service. They earn an average of $45,000—not much compared with Northwest pilots, but twice as much as the starting salaries Mesaba is currently proposing.

From the vantage point of labor, the ability to play one group of unions off another, known as "whipsawing" in the trade, is one reason why major airlines contract with several feeders. Mesaba currently competes for business with Pinnacle, a Memphis-based airline that is a Northwest spin-off. Northwest is hoping Pinnacle, too, can wrest concessions from its unions.

Adding to the pressure on both regional services, Northwest is in the process of creating a third player, Compass, which will be a wholly-owned subsidiary that could be flying as many as three dozen jets within a few years. Northwest has ordered 72 jets for mid-range flying, but has not said whether all will go to Compass. Until they arrive, Compass may start flying with one of the jets Mesaba was scheduled to start flying in the weeks prior to the onset of bankruptcy. Not surprisingly, Northwest's pilots opposed Compass's creation, and won a provision in their most recent contract allowing them to retain the right to fly any plane with more than 76 seats.

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In 1997, Wychor says, Northwest took away half of Pinnacle's routes and gave the business to Mesaba. During that round of negotiations, Mesaba hired a number of laid-off Pinnacle pilots. This time, with the largest jets being taken from Mesaba's fleet and sold to buyers in Dublin and Paris, some of Mesaba's pilots are actually following their planes overseas, he says. The routes Mesaba can serve with the planes left in its fleet—49 Saabs, the smallest planes in Northwest's fleet of regional feeders with 30-34 seats—are the least cost-effective.

But even that business isn't guaranteed. Northwest says it will not sign new contracts with Mesaba until it has reduced its labor costs. When both sides started wrangling earlier this year, Mesaba wanted wage cuts of 19.4 percent for six years; management has since backed down to 17.5 percent for up to five and a half years. The unions have agreed to cuts of 15 percent, but want a shorter contract. Union officials say their proposal gives Mesaba a 6 percent profit margin; the company's reorganization plan calls for 8 percent.

"There's really a sinister aspect of this," says Nick Graneth, an attorney representing the unions. "You have Mesaba, and behind them you have MAIR, and behind them you have Northwest. So there's this puppetmaster aspect of this. Who is negotiating with MAIR for MAIR? With MAIR for Northwest?"

This week, judges in two different courtrooms are deciding whether Mesaba can impose unilateral wage cuts and whether its unions can strike in response. At press time, Mesaba was under court order not to cut pay until midnight, Thursday October 26, and a separate ruling on the airline's request to bar a strike was pending.

In either case, it remains to be seen whether any Mesaba employee with the possibility of work elsewhere will stick around to walk the picket line. "It's not a particularly great job to have at the moment," says the U of M's Aggarwal. "If you have any other option at this time, you take it."

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