Monday, October 10, 2005


The lede of this story on the possibility of Mesaba airlines going into bankruptcy is that Mesaba put too many eggs in one basket.
The first three weeks of the Northwest bankruptcy have not been kind to Pinnacle and Mesaba Airlines, the "regional carriers" that operate under the "Northwest Airlink" banner. Memphis-based Pinnacle and Mesaba are independent companies with a highly dependent business plan: Their schedule, revenue, and aircraft come from one place -- Northwest Airlines.
The schedule now is being pinched, and newer planes scheduled for delivery from NWA (a/k/a Norwegians With Attitude) are now being postponed. And NWA owes Mesaba's parent company Mair Holdings $28 million, on which its payment is late.

There are many flights that spread through the rest of Minnesota and the upper Midwest through these independent airlines, and many places are investing time and money to improve their regional airports to take more traffic. I seldom drive to MSP any more as the price of the round-trip addition to come up to St. Cloud is $70. As well, there is a large problem for these airlines when they have a monopolist airline able to jack around the schedule, as has happened already in Aberdeen.

You do have to wonder about a strategy where you put all your eggs in one basket, but given the difficulty of getting competition into regional airports, you may have little choice. If Mesaba does file bankruptcy, regional air travellers may have even less.