NWA To Cut Mesaba Out | Mesa Chips In $512m.

[Guest Operation Bomberclad]

CHRISTMAS LAYOFFS SEASON AROUND THE CORNER- ONLY 73 SHOPPING DAYS LEFT, FOLKS!!

Loss of NWA jets could devastate Mesaba

Liz Fedor, Star Tribune

Published October 8, 2003

MESA08

Northwest Airlines appears on the verge of delivering a devastating blow to Minneapolis-based Mesaba Airlines that could result in the loss of 40 percent of Mesaba's revenue and jobs.

Mesaba revealed Tuesday that Northwest might terminate its contract with Mesaba to fly 36 Avro RJ-85 jets, which are used on regional Northwest routes.

Management at the regional airline broke the news to employees late Tuesday. Mesaba spokesman Dave Jackson said they were shocked.

Northwest has not pulled the financial plug on Mesaba, but Mesaba CEO John Spanjers was not optimistic. "While Northwest is finishing its analysis, Mesaba will be developing plans to address the potential permanent removal of the RJ-85 fleet," Spanjers said in a prepared statement.

Mesaba relies solely on Northwest for its revenue because it has two service agreements to provide regional flights.

Northwest spokesman Bill Mellon confirmed that Northwest wants to remove five Avros from service in the next few months. He said Northwest agreed at Mesaba's request to extend the termination notice period on the Avro contract to Dec. 15."

"Northwest said in mid-September that it would allocate 34 regional jets to Memphis-based Pinnacle Airlines instead of Mesaba.

Pinnacle is now flying 69 Canadair Regional Jets for Northwest under a regional service contract. Northwest's Mellon said Pinnacle is scheduled to get four more CRJs this year, and an additional 30 will be delivered in 2004.

Under the Northwest service contracts, Mesaba is prohibited from providing service to another carrier. That places Mesaba in an incredible bind, said Joel Denney, an airline analyst for U.S. Bancorp Piper Jaffray in Minneapolis.

First Northwest denied Mesaba a growth opportunity with the CRJs, but now it appears that it will be hit with reductions. "They have to find a way to gain more of Northwest's business or negotiate to have a separate business that is distinct from Northwest," Denney said."

(Note: This will be the only way that Jazz will survive in the current scrum with low cost. If a seperate business deal can be concluded between other prominent carriers and Jazz, then its business plan would be similar to those in the U.S.

Sickening cruelty on the part of Norhworst. Hate to admit it, but I think that Klyde is right and that he stands to carry away the majority of the regional market from the mothercorp.

Funny how dependance on anti-labour consulting groups have only resulted in loss of market share, alienation of its workers, and the destruction of regional markets. I have to ask- was it worth it? For the consulting firms peddling an extremist political agenda akin to dianetics, Yes! For business? At least the competition didn't have to work very hard to succeed.)

http://www.startribune.com/stories/1405/4141833.html

http://memphis.bizjournals.com/memphis/stories/2003/10/06/daily10.html

MESA BUYOUT NEWS - AIRLINE BOUGHT CHEAP!!!

Mesa Air Offers $512M for Atlantic Coast

Mesa Air Makes Unsolicited Offer to Buy Altantic Coast for Stock Valued at $512 Million

The Associated Press

PHOENIX Oct. 6 — Mesa Air Group Inc., which operates regional flights under US Airways Express and other brands, Monday said it offered to buy Atlantic Coast Airlines Holdings Inc., which has been flying as United Express, for stock valued at $512 million.

The deal would create a company with a fleet of nearly 300 aircraft with broad access to major U.S. markets.

Atlantic Coast, which is based in Dulles, Va., said in July that it would end its relationship with United Airlines, which is in bankruptcy, and start its own low-fare airline.

"Ornstein said he expects earnings of a combined entity to increase by more than 25 percent. In 2002, Mesa and Atlantic posted revenue of $497 million and $761 million, respectively.

Mesa said it offered 0.9 Mesa shares for each Atlantic Coast share. Based on the Friday closing price, the offer was priced at $11.30 per Atlantic Coast share, which represents a 25 percent premium of Atlantic's closing price of $9.02 on Friday.

Mesa shares closed Monday at $11.56, down 99 cents, or 7.9 percent, on the Nasdaq Stock Market.

Atlantic Coast shares ended up $2.03, or 23 percent, at $11.05, also on the Nasdaq."

http://abcnews.go.com/wire/Travel/businesstraveler/ap20031006_1436.html

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