Northwest agrees terms on return of Avro RJ85s to lessors

Northwest Airlines has reached an agreement with its creditors over lease terms on 13 leased Avro RJ85s. Under the agreement, which is subject to bankruptcy court approval, lease rates on the aircraft will be reduced to US$70,000 a month until they are withdrawn from service later this year. The RJ85s are sub-leased to Mesaba for operation as Northwest Airlink. Although the agreement is intended to secure the RJ85 fleet for the remainder of the year, it may not last that long. Mesaba, which is itself in bankruptcy court, has once again applied for permission to nullify its labor agreements with the unions for its pilots, flight attendants, and mechanics. The airline is seeking 19.4% salary concessions, which the unions are resisting. Although the judge overseeing Mesaba’s Chapter 11 bankruptcy case rejected an earlier effort to cancel the union contracts, he has indicated he would reconsider if no agreement is reached and the airline remedies the technical problems in its previous application. All three unions have vowed to strike if the judge allows the airline to rejects its union contracts, a move which would certainly kill the airline. Moreover, Mesaba may run out cash by 1 September. CityJet has been negotiating to take over many of Northwest’s RJ85s, but no agreement has been announced yet.

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