http://www.startribune.com/535/story/173423.html Mesaba Gets Ready For Its Fleet To Be Cut By Half Jan-10-2006 Liz Fedor Mesaba Airlines President John Spanjers said Monday that he's moving ahead to dramatically slash operating expenses, because "everything that we've seen from Northwest" signals that the big carrier will take away all of Mesaba's regional jets this year. Just a few months ago, Mesaba operated a fleet of 100 planes for Northwest. Now, Mesaba is developing a business plan to survive with its fleet cut in half and limited to 34-seat Saab turboprops. "We have to secure our core business," Spanjers said during an interview at the airline's headquarters in Eagan. "Our focus is putting together a cost restructuring plan that allows us to support an operation of 49 Saabs." It was only two years ago that Mesaba looked poised for growth. Northwest had decided to keep 69-seat Avro regional jets in Mesaba's fleet, and Mesaba management had forged an agreement with the Air Line Pilots Association and averted a strike. By early 2005, Mesaba was in an expansion mode because Northwest had decided to give Mesaba a third type of aircraft: 44- to 50-seat Canadair Regional Jets (CRJs). Now, bankrupt Northwest -- which owns or leases the aircraft that Mesaba flies -- wants the regional carrier to slash its operating costs and it expects to take the Avros out of Mesaba's fleet. Spanjers said the two CRJs the airline got last year likely will come out of the fleet in the spring. The forced downsizing was the chief reason the regional carrier filed for a Chapter 11 reorganization Oct. 13, Spanjers said. But Mesaba finds itself in an unusual situation, proceeding through bankruptcy at the same time that Northwest, its main business partner, is restructuring. Spanjers told employees recently that "Mesaba cannot wait for the Northwest bankruptcy to come to a conclusion" before acting on its own financial challenges. In the three months since its bankruptcy filing, Mesaba has furloughed 95 employees. The carrier, which flies out of the Twin Cities, Detroit and Memphis hubs for Northwest, employs 3,707 people. More layoffs are planned as Mesaba's fleet shrinks. And Northwest has left little doubt about how it views the Avros that Mesaba flies. "The four-engine Avros are very expensive to operate, especially in the current high-fuel-cost environment, and will be removed from the fleet as part of the Northwest bankruptcy process," Northwest management said in a newsletter to employees. Nine Avros were taken out of service Oct. 31. Three more came out last week, and the remaining 23 will be phased out this year, Spanjers said. He did not estimate how many layoffs might happen this year, but he stressed that he will pursue other opportunities beyond Northwest's Saab routes. For example, he hopes to bid on some regional flying for Continental Airlines. Mesaba, Pinnacle Airlines -- Northwest's other regional partner -- and U.S. regional airlines have gotten a request for proposals from Northwest for flying routes that can be served by jets seating 76 or fewer passengers. Spanjers said the proposals are due this month, and Mesaba will submit one that includes cost breakouts for 50- and 70-seat jets. He was not surprised that Northwest decided to "shop that business and find who can do it at the lowest cost that favors Northwest Airlines." The bidding process has upset Duane Woerth, president of ALPA International. Last week, he told the Star Tribune that he will pull out all the stops to hamper a race to the bottom on pilot pay rates at regional carriers. Northwest's proposal process can be used by managements at a variety of carriers to press for pilot concessions, but Woerth said he's working with ALPA units nationwide to block those attempts. Spanjers is spending considerable time trying to reach labor agreements with unions at Mesaba. He is attempting to reduce labor costs by 19.4 percent, with the reductions to come through pay and benefit cuts and work rule changes. Mesaba is still in negotiations with unions representing pilots, flight attendants and mechanics. Spanjers said the lower labor rates must be in place by April 1, and management will also be part of those cutbacks. The smallest union at Mesaba, the Transport Workers Union, has become the first to ratify a new deal. A six-year concessionary agreement for its 35 members was approved Monday. Perry Sprague, TWU Local 543 president, said 78 percent of those voting approved the contract. He did not release terms of the pact. "Even though we ratified the agreement, this is going to be very difficult for our members financially," Sprague said. "But we thought it would be better to try to come to a consensual agreement instead of leaving the decision up to a bankruptcy judge and Mesaba Airlines." Spanjers said the company is prepared to ask the court to nullify contracts and impose new pay rates and work rules if agreements can't be reached with other unions. --------------------------------- Yahoo! DSL Something to write home about. Just $16.99/mo. or less