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NWACQ News Mesaba Airlines to become Northwest Airlines Subsidiary Under New Plan

MINNEAPOLIS & ST. PAUL, Minn.--(BUSINESS WIRE)--Mesaba Airlines, a subsidiary of MAIR Holdings, Inc. (NASDAQ:MAIR) announced today that it has signed a stock purchase and reorganization agreement with Northwest Airlines (Pink Sheets:NWACQ) under which Mesaba would become a wholly-owned subsidiary of Northwest Airlines, Inc.

Intensive negotiations with Northwest Airlines officials concluded this week with the boards for both Mesaba Aviation and MAIR Holdings, Inc. approving the deal.

"Mesaba now is positioned to form a new partnership with Northwest Airlines and meet the on-going challenges of the airline industry,” Mesaba President and Chief Operating Officer John Spanjers said. “The support of Northwest and the cooperation of our first-rate, dedicated employees and our vendors have allowed us to use this process to lay the groundwork for Mesaba’s future success."

The stock purchase and reorganization agreement is part of Mesaba’s Plan of Reorganization (POR) that it filed today with the United States Bankruptcy Court for the District of Minnesota. The Company intends to file its related Disclosure Statement with the Court in the coming days.

"We have achieved exceptional results across the board during this restructuring process and today’s filing represents a significant step toward a successful future for Mesaba,” Spanjers said. “Our efforts will ensure that we emerge from Chapter 11 as a competitive regional carrier with a solid financial foundation and a continued focus on unmatched operational performance.”

Mesaba intends to exit from Chapter 11 bankruptcy protection by the spring of this year.

In addition to the stock purchase and reorganization agreement, the POR addresses the treatment of creditors’ claims and assumes the new agreements with Mesaba’s labor groups and certain vendors and suppliers.

Restructuring Progress

Mesaba’s comprehensive restructuring plan reduces costs by $68 million a year, secures its core business with Northwest for the 49 Saab 340Bs and positions the company for future growth opportunities. As a result of its on-going restructuring initiatives, the company has achieved reductions in its fixed costs, vendor costs, aircraft and engine leases, and labor costs.

“Mesaba employees have made a considerable sacrifice to achieve that cost structure,” Spanjers said. “Our employees have exemplified the true commitment and professionalism that makes Mesaba the exceptional airline that it is.”

Plan Highlights

Under the Stock Purchase and Reorganization Agreement with Northwest Airlines, all of the existing equity securities of Mesaba will be cancelled and terminated. Northwest has agreed that Mesaba has an allowed $145 million unsecured claim in Northwest’s Chapter 11 case in exchange for 100 percent of Mesaba’s new common stock to be issued on the effective date of the Plan. It is expected that the $145 million claim will be sold to fund the plan distributions to creditors, with the remainder of the sale proceeds being distributed to MAIR Holdings, Mesaba’s parent.

Timing

The Plan is expected to become effective approximately two weeks after the Bankruptcy Court confirms the Plan. The confirmation hearing will be set by the Bankruptcy Court at a later point in time, but is expected to occur in mid-April 2007.

Forward looking statements

This news release contains forward-looking statements that are based on the best information currently available to management. These forward looking statements are intended to be subject to the safe harbor protections of the Private Securities Litigation Reform Act of 1995. There can be no assurance that actual developments will be those anticipated by Mesaba Aviation, Inc. Actual results could differ materially from those projected because of a number of factors, some of which Mesaba cannot predict or control.

About Mesaba Airlines

Mesaba operates as a Northwest Jet Airlink and Airlink partner under service agreements with Northwest Airlines. The airline serves 72 cities in the United States and Canada from Northwest’s and Mesaba Aviation’s three major hubs: Detroit, Minneapolis/St. Paul, and Memphis. Mesaba Aviation operates an advanced fleet of regional jet and jet-prop aircraft, consisting of the 34 passenger Saab SF340, and the 50-passenger Canadair Regional Jet. Mesaba filed for Chapter 11 bankruptcy protection on October 13, 2005 and continues to operate as a debtor-in-possession. Mesaba maintains a web site at www.mesaba.com.

Mesaba Airlines is a wholly owned subsidiary of MAIR Holdings, Inc. MAIR Holdings, Inc. is traded under the symbol MAIR on the NASDAQ National Market.

More information about Mesaba Airlines is available on the Internet at: http://www.mesaba.com