Late today the Pioneer Press reported that Northwest Airlines is considering a merger deal with its regional partner, Mesaba. Northwest mentioned the potential deal in a note to employees on its employee website. Both airlines have now confirmed they are in talks.
According to the article,
“Officials of the airlines said the idea of a merger came from recent discussions on how Northwest and Mesaba can work together. Both airlines are based in Eagan, and both have had a difficult year of cutting costs, cutting jobs and negotiating labor contracts as they’ve restructured under bankruptcy protection.
The airlines discussed Northwest becoming a co-sponsor of Mesaba’s bankruptcy reorganization plan whereby Northwest would become the owner of Mesaba “in a principally non-cash” deal, said Northwest spokesman Bill Mellon. Such a deal would require approval by the bankruptcy court.
Airline officials said the discussions continue as the two carriers work toward a definitive agreement.”
Doug Abbey, consultant with the Velocity Group in Washington was quoted as saying,
“The Mesaba saga has really been a soap opera of the highest magnitude,” Abbey said. “It solves a number of problems: Mesaba’s future and Northwest’s need for a high-quality regional partner.”
Abbey believes Northwest would operate Mesaba separately, and that such a deal would not affect Northwest’s planned internal Compass regional operation.