Mesaba Files For Bankruptcy... Just As Comair Announces Cuts

One of Northwest's small jet providers, Mesaba Airlines, has filed for bankruptcy protection. This move was precipitated by Northwest's trimming of Mesaba's fleet, eliminating one aircraft type, the Avro RJ85, while reducing the numbers of the other two aircraft in the fleet, the CRJ-200 and the Saab 340 turboprop. Like any other small jet provider, Mesaba has been having trouble adapting during this challanging time - they must downsize quickly to stem their high losses. Northwest seems to be committed to Mesaba for CRJ-200 and Saab 340 operations, even though their flights will be reduced. Mesaba has not been paid $30 million for some recent flights by Northwest, which has caused Mesaba to sue Northwest. With a planned fleet reduction of 28%, things will be tough at Mesaba, but they are really tough everywhere.

Comair, Delta's regional jet subsidiary based out of Cincinnati announced cuts today that will trim its workforce by 1000 people (including 350 previously announced job cuts). The small jet provider also said that it will trim up to 30 50-seat aircraft from its fleet, with 11 gone by December. The airline has the highest costs of any Delta small jet provider and Delta is giving them an opportunity to cut costs more. If Comair can't negotiate further decreases in labor costs as well as lower supply chain costs, the airline could either be liquidated or just sold - possibly to Mesa or Skywest, which are the long-term players in the small jet provider business. Comair has got stormy skies ahead, but it can manage if it gets costs down and if Delta has a truly loyal base at Cincinnati. Ever since Delta's SimpliFares program was started, more passengers have been drawn back to Cincinnati from other airports such as Louisville (which has Southwest service). However, if Comair fails to cut costs, there is a realistic possibility a Delta Cincinnati hub could be downsized further or shut down.