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Old 10-20-2005, 09:55 PM   #1  
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Default NWA OKd to return 108 planes

NWA gets OK to return 108 planes

October 20, 2005

A bankruptcy judge will allow Northwest Airlines Corp. to return 108 aircraft if the airline cannot negotiate lower lease and debt payments on the planes.

Judge Allan L. Gropper gave Northwest permission for the move Wednesday. Next week, he is scheduled to hear a second request from the airline for the same authority on another 106 planes.

By having the option to eliminate planes, Northwest wants to bring its fleet size and type of planes in line with what it can afford, travel demand and its plans to shrink its schedule, the airline said in court filings in New York.

Some of the planes for which Northwest can now reject payments on include: 27 Boeing 757s, seven DC-10s, 22 Airbus 320s and 35 small Avro planes, which Northwest leases to its commuter carrier, Mesaba Airlines Inc., court records say. The planes in Wednesday's hearing include most of the models in Northwest's fleet.

Northwest, which carries more than 60% of travelers who start their trips at Detroit Metro Airport, leases 263 planes and owns another 350 planes, based on its Web site, which does not include planes that are in storage.

Gropper decided Wednesday that Northwest must give five days' notice to the planes' owners to give them time to object before the airline can abandon the aircraft. The notice is a compromise between the three days Northwest had offered and the 10 days that aircraft owners sought.

Gropper earlier this month gave Northwest permission to return seven leased planes Northwest had stopped using.

Companies often use the bankruptcy process to ratchet down payments for leases and debt.

Northwest will do this all over again Oct. 27, when a hearing is scheduled to give the airline permission to eliminate another 106 planes if it can't scale down its payments on those aircraft.

Northwest's "fleet review process is not complete, is inherently dynamic and is expected to result in additional aircraft being returned to lessors and lenders in order to match fleet requirements with current market dynamics," the airline said in its request last week.

The new list of planes Northwest might abandon includes 49 turboprop planes, which accounts for nearly half of Mesaba Airlines' fleet.

Northwest has already told Mesaba that it plans to remove 10 of the 34-seat turboprops from Mesaba's fleet by early January.

Eliminating even more of those planes would be another blow to the commuter carrier, which filed for Chapter 11 bankruptcy a month after Northwest's bankruptcy filing.

Minneapolis-based Mesaba, which operates 117 flights a day out of Metro, filed after Northwest held back $30 million in fees it owes Mesaba and told the feeder carrier that it plans to eliminate nearly half of Mesaba's 100 planes including those 10 turboprop planes and all 35 of the Avros Mesaba flies, starting with nineby the end of this month.

The list of additional aircraft Northwest wants permission to abandon also includes 27 Airbus aircraft, 10 Boeing 747s and five Boeing 747 cargo planes. A hearing about those planes is scheduled for Oct. 27.
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