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Northwest Commuter Lines Must Continue to Fly

Airlines: The federal government orders the carrier to help its affiliates service underserved areas despite a pilots strike.

September 05, 1998| From Reuters

MINNEAPOLIS — Northwest Airlines Corp.'s commuter affiliates must continue to fly to underserved areas despite a pilots strike that has shut down the nation's fourth-largest airline for a week, the federal government said Friday.

St. Paul, Minn.-based Northwest must also provide the necessary support for Mesaba Holdings Inc.'s Mesaba Aviation and Express Airlines Inc. to provide service to 17 smaller Midwest and Southeastern cities, Secretary of Transportation Rodney Slater ordered under the Essential Air Services program.

Northwest, whose 6,200 pilots went on strike over pay and job security issues Aug. 28, said it was evaluating the order. The airline owns 100% of Express Airlines and 30% of Mesaba. Mesaba could not be reached for comment.

Also Friday, the airline said its passenger load factor, a measure of how many paying customers are in its seats, fell to 79.3% in August from 80.1% a year ago. The strike helped lead to an 11.6% decline in revenue passenger miles, or miles flown by paying passengers.

Northwest shares fell 56 cents to close at $26.50 on Nasdaq.

Northwest could not comment on whether Slater's order would force it to reinstate some of the more than 27,500 employees it laid off this week because of the strike. The two commuter airlines have said they rely on Northwest to provide support services.

They also rely on their ties to Northwest routes as Northwest Airlink to provide passengers, analysts noted.

Those links, through agreements called code-sharing, give the Transportation Department authority to include Northwest in its order, because it also is responsible for the quality of the commuter carriers' service under the agreements.

The order by Slater comes a day before the Air Line Pilots Assn. and Northwest management were to meet in Chicago with a federal mediator to try to revive negotiations about pay and other issues. that broke off before the pilots' walkout.

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