Northwest's Woes Pressure Mesaba

Call it trickle-down bankruptcy.

Northwest Airlines' (NWACQ Quote) efforts to reject airplane leases and rejigger its fleet during its restructuring have prompted one of its regional partners to contemplate joining it in bankruptcy.

MAIR Holdings (MAIR Quote), the parent of Northwest partner Mesaba Airlines, said in a regulatory filing Friday that it is considering "all options," including Chapter 11.

Recent actions by Northwest, the nation's No. 4 carrier, will deliver a substantial hit to Mesaba's revenue and lead to the regional carrier incurring substantial losses in the fourth quarter of this year and the first quarter of 2006, the filing said.

Mesaba estimates that Northwest owes it $28 million for services provided before the Minnesota-based airline's Sept. 14 bankruptcy filing. Since then, Northwest has made schedule and fleet changes that could reduce Mesaba's fleet by 28% from planned levels.

Northwest has already forced Mesaba to park nine British Aerospace Avro regional jets, and the legacy carrier wants to terminate the leases on all 35 Avros that Mesaba flies.

In Friday's filing, Mesaba also disclosed that Northwest plans to remove 10 Saab 340 jet-props from its schedule on Jan. 4. Northwest has also advised Mesaba that it will "likely be unable" to meet a delivery schedule for 13 Canadair regional jets that were on order for the regional carrier.

Over the past month, MAIR shares have fallen more than 40% on worries related to Northwest's bankruptcy. On Friday they traded down 15 cents, or 2.8%, to $5.11.

Another Northwest regional partner, Pinnacle Airlines (PNCL Quote), has also suffered because of Northwest's bankruptcy, and its stock has fallen almost 45% during the past month.