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Airlines

Northwest Airlines and Mesaba Aviation Inc. Announce Major Regional Jet Fleet Expansion

Strategic Insights

— 2 min read

Northwest Airlines and Mesaba Aviation Inc. have made a significant announcement regarding the expansion of Mesaba's regional jet fleet. The development will see Mesaba operate 36 Avro RJ85s, a doubling of its current fleet, to provide increased capacity for Northwest. However, this move has sparked concerns among the Northwest Air Line Pilots Association (ALPA), who fear the expansion will lead to outsourcing of Northwest pilot jobs. The new agreement between Northwest and Mesaba has been met with skepticism by ALPA, who argue that the addition of more regional jets will result in Northwest pilots flying routes that rightfully belong to them.

Key Takeaways:

  • Mesaba Aviation Inc. will double its fleet of regional jets with financial assistance from Northwest Airlines, increasing the number of Avro RJ85s from 18 to 36.
  • The new agreement between Northwest and Mesaba will see all 36 Avro RJ85s in operation by August 2000, compared to the current 18.
  • The Northwest Air Line Pilots Association (ALPA) has expressed concerns that the expansion will lead to outsourcing of Northwest pilot jobs.
  • The agreement prohibits Mesaba from operating Avros with more than 69 seats, but the RJ85s have considerably more passenger capacity.
  • Mesaba President Bryan Bedford argued that the expansion is necessary for Mesaba to remain competitive as a regional carrier and to feed new traffic to Northwest.
  • Northwest officials have repeatedly stated that the expansion is necessary to remain competitive in the market.
  • The National Mediation Board has been involved in the contract negotiations between Northwest and its pilots since August 1996.
  • Northwest is the largest shareholder in Mesaba, controlling over 30% of the carrier's stock.
  • Mesaba plans to issue a warrant to Northwest for the purchase of 1,435,230 shares of Mesaba Holdings stock at an exercise price of $21.25.

Statistics:

  • 36: The number of Avro RJ85s that Mesaba will operate by August 2000.
  • 18: The current number of Avro RJ85s operated by Mesaba.
  • 91: The number of cities served by Mesaba Aviation Inc. across 19 states and Canada.
  • 19: The number of states and Canada that Mesaba Aviation Inc. serves.
  • $23.31: The price of Mesaba stock as of the market close on Friday.
  • 1,435,230: The number of shares of Mesaba Holdings stock that Mesaba will issue to Northwest as part of the warrant.

Sources:

  • "Northwest Airlines and Mesaba Aviation Inc. to Expand Regional Jet Fleet" (date unknown)
  • "Northwest Airlines and Mesaba Aviation Inc. Announce Major Regional Jet Fleet Expansion" (Staff Writer Patrick Kennedy and the Associated Press, date unknown)
  • Northwest Airline Pilots Association (ALPA) website (date unknown)
  • Mesaba Aviation Inc. website (date unknown)

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