Delta Terminates Mesa Contract!!!

[Eagle757shark]

UPDATE 1-Mesa Air says to fight Delta plan to quit contract

Tue Apr 1, 2008 9:27pm EDT
(Adds comment from Mesa, Delta, details, paragraphs 4-9)
NEW YORK, April 1 (Reuters) - Mesa Air Group Inc (MESA.O: Quote, Profile, Research) on Tuesday said it plans to contest Delta Air Lines Inc's (DAL.N: Quote, Profile, Research) plan to terminate a contract with its Freedom Airlines Inc unit.
Phoenix-based Mesa said Delta notified it on March 28 of its intent to terminate a connection agreement with Freedom dated May 3, 2005.
It said Delta alleged that Freedom failed to complete a specified number of flights on ERJ-145 jets during three months of the six-month period ending in February. Mesa said the notice would allow Freedom to provide connection services to Delta while the airlines work out a "transition agreement."
Mesa said it intends to defends its rights under the contract. "Delta's effort to terminate the agreement will not be upheld in a court of law," Mesa Chief Executive Jonathan Ornstein said in a statement.
Gina Laughlin, a spokeswoman for Atlanta-based Delta, said the carrier decided to terminate the contract "due to operational performance. We expect the operational pulldown to be orderly and have minimal impact to our customers."
Freedom's connection agreement with Delta governing larger CRJ-900 jets is not affected, both carriers said.
Embraer (EMBR3.SA: Quote, Profile, Research) builds ERJ-145 jets, while Bombardier Inc (BBDb.TO: Quote, Profile, Research) builds the CRJ-900 jets.
Delta on March 18 announced plans to cut 2,000 jobs and scale back flights, in the wake of rising fuel prices and a weakening economy. It said it plans to take 15 to 20 mainline aircraft and 20 to 25 regional jets temporarily out of service to reduce capacity.
Mesa said it operates 182 aircraft. Freedom operates mainly in the U.S. southeast, according to Mesa's Web site. (Reporting by Jonathan Stempel; Editing by Gary Hill)

 

[ACL65PILOT]

Awesome. I hope that it sticks

 

[AlbieF15]

Saw the PFN-MCO route done by Freedom/Mesa in the past is now ASA CRJ 100s in May/June.

'bout to get nasty in 50seaterville....

Good luck to all involved.

 

[Andy]

This is all part of trimming airline schedules. Delta looks like they're doing this VERY smart. They'll shift their RJ flying around and upguage some city pairs to mainline while reducing frequency (ie 1 MD80 for 2 RJs).
With the additional new aircraft that they've got coming online, this is one way to make room for them while cutting back on ASMs.

This will likely stick; if it does, we'll probably see other majors trim back regional partner flying.

 

[RiddleEagle18]

Delta currently has 9 connection carries and has made it know they intend to bring that number down to 4 or 5 to try and more closely control the overall delta product. Who goes next?

 

[Andy]

Delta currently has 9 connection carries and has made it know they intend to bring that number down to 4 or 5 to try and more closely control the overall delta product. Who goes next?

Whichever company fails to meet its contractual requirements.

 

[fly4surf]

Bye Bye Mesa.

 

[glasspilot1]

Delta, you get what you pay for! You put out the bid for your feed to the lowest common denominator and what do you get? Mesa.

 

[~~~^~~~]

Delta currently has 9 connection carries and has made it know they intend to bring that number down to 4 or 5 to try and more closely control the overall delta product. Who goes next?

There is a slight problem... We thought the Mesa contract was the easiest to walk away from. Now we learn that Mesa is going to fight this in Court and Mesa still operates the CRJ900's. Could something be negotiated? Mesa will sure try.

SkyWest (& alter ego, ASA) has Delta under a contract very favorable to SkyWest. That isn't going anywhere. Republic, Chautauqua, Shuttle likely have an strong deal as well. Big Sky, already gone. Comair wholly owned. Express Jet may be the only carrier with a shorter term deal.

IMHO it would be worth while to buy back ASA just to exit the SkyWest agreement.

I'm still thinking that Delta's excess RJ's are going to be used to backfill DC9's that will be parked very quickly. Even the CRJ200 has a lower CASM than a DC9.

Delta can not legally cancel the contracts mid term with these RJ lift providers and it is a problem. Delta was paying SkyWest around 2.5 Billion per year, plus fuel.

I'm telling you, we have to carefully watch the changes to Section 1 in whatever transition agreement is reached with management.

 

[Andy]

I'm still thinking that Delta's excess RJ's are going to be used to backfill DC9's that will be parked very quickly. Even the CRJ200 has a lower CASM than a DC9.

When did Delta get DC9s?
If you're still counting on a DAL/NWA merge, where do you expect the additional investment capital to come from? USAirways got a $1.5B capital injection on their merger; your merge would require a higher amount of new capital than USAirways required.