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Tuesday January 6, 2009
Reuters
Mesaba May Seek Bankruptcy As Northwest Cuts Planes

The parent of Mesaba Aviation said bankrupt Northwest Airlines' plan to remove 10 planes from Mesaba's schedule could push the regional Northwest partner into bankruptcy.

High fuel bills and cut throat competition pushed Northwest into bankruptcy last month. Like Delta Air Lines, which sought bankruptcy protection on the same day, Northwest has been trying to cut excess planes from its fleet.

Northwest will remove 10 Saab B+ aircraft from Mesaba's schedule as of January 4. The change to Mesaba's schedule and fleet could force its move toward court protection, Mesaba parent Mair Holdings said in a government regulatory filing on Friday.

Mair also told the Securities and Exchange Commission that Northwest has advised Mair that it likely will be unable to meet the delivery schedule for 13 regional jets that are to be delivered according to a previous agreement.

Mair said Northwest's schedule and fleet changes since Northwest filed for bankruptcy last month could result in a 28 percent reduction in Mesaba's fiscal year-end 2006 fleet plan.

Losses in the third and fourth quarter could be substantial Mair said.

The reductions to Mesaba's fleet will result in a substantial reduction in the regional carrier's revenue, Mair said, adding that Mesaba is focused on reducing all areas of its cost structure.

Separately on Friday, Northwest won bankruptcy court approval to cancel leases on six different jets which are being stored in the desert, including a Boeing 747 and 757, four DC-9s and a DC-10, over objections by some banks and lessors.

Northwest also wants permission from US Bankruptcy Judge Allan Gropper to cancel leases on additional aircraft, but that issue was postponed until later this month.

Also during the hearing in US bankruptcy court in Manhattan, Northwest's lawyer Bruce Zirinksy said the airline was close to settling a dispute with American Express over USD$63.4 million the airline says the credit card company owes it.

He declined to provide any details of the accord.

(Reuters)

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