Mesaba Airlines has announced that the U.S. Bankruptcy Court for the District of Minnesota has confirmed the Company’s Plan of Reorganization, setting the stage for Mesaba to emerge from Chapter 11 in the latter part of April. In confirming the plan, the Court determined that the POR had been accepted by creditors and otherwise satisfied the requirements of the Bankruptcy Code. The company’s creditors voted overwhelmingly in support of the Plan. The POR implements a stock purchase and reorganization agreement with Northwest Airlines Corporation under which Mesaba would become a wholly-owned subsidiary of Northwest Airlines.
“Today’s confirmation of our Plan by the Bankruptcy Court validates 18 months of work to make Mesaba a sustainable regional carrier, positioned to become a wholly-owned subsidiary of Northwest Airlines,” said John Spanjers, Mesaba president and COO. “We are capable of great things moving forward and that’s been demonstrated by the exceptional commitment and professionalism of our employees during this difficult time in our history.”
Mesaba intends to exit from Chapter 11 bankruptcy protection in the final week of April 2007 when the POR becomes effective and the acquisition by Northwest Airlines will be completed.
As previously announced, Mesaba’s comprehensive restructuring plan reduces costs by $68 million a year, secures its core business with Northwest for the 49 Saab 340Bs and positions the company for future growth opportunities. Already, Mesaba is moving quickly through the Federal Aviation Administration certification and training process to begin operating the first of 36 Bombardier Canadair Regional Jet (CRJ) 900s for Northwest Airlines.
As a result of its on-going restructuring initiatives, Mesaba has achieved reductions in its fixed costs, vendor costs, aircraft and engine leases, and labor costs.
“Mesaba employees have made a considerable sacrifice to achieve this cost structure,” Spanjers said. “We are now pleased to be in a position to recall a number of our furloughed team members and provide opportunity for all employees with the addition of the CRJ900 to our fleet.”