inflightboi175
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PHOENIX — A federal judge has ruled against regional carrier Mesa Air Group in a long-running dispute with Delta Air Lines over the larger carrier's right to cancel a regional jet service contract.
Mesa said in a statement that it may now have to lay off 500 workers at its Freedom Airline subsidiary because 22 of its regional jets will be without work.
Georgia-based U.S. District Judge Clarence E. Cooper prevented Delta from canceling the $20 million-a-month contract in June 2008. Delta said Phoenix-based Mesa wasn't completing enough of its Delta Connection flights. But Mesa argued that was because Delta asked it to cancel many flights out of John F. Kennedy International Airport in New York during bad weather.
Cooper held a trial last month, and in a ruling issued Monday, reversed himself and ruled for Atlanta-based Delta.
Cooper wrote that the contract was clear that a 95 percent completion rate was required and that Mesa hadn't proven any of its legal theories, including that the companies had verbally agreed to modify the terms and not to count weather-related cancellations.
He also ordered Mesa to pay Delta nearly $3 million for overbilling Delta.
"We are extremely disappointed by the District Court's decision," Mesa CEO Jonathan Ornstein said in a statement. "We have at all times sought to act as a good partner and work with Delta as a member of Delta Connection. Unfortunately Freedom's willingness to proactively cancel flights in JFK at Delta's request for the benefit of Delta was held against Freedom and was used as the sole basis to terminate our contract."
A call seeking comment from Delta late Monday wasn't immediately returned.
Mesa filed for bankruptcy protection in January, hoping to shed planes it no longer needs and adjust to drops in air travel due to the economic downturn.
Mesa has been shrinking operations and lost a key United contract for 26 regional jets in December. It now operates 99 aircraft as Delta Connection, US Airways Express and United Express, and independently as Mesa Airlines and go! Mokulele in Hawaii.
http://www.google.com/hostednews/ap/article/ALeqM5gRUufB5uYxxSwY1rUKV-7rJzZrSQD9FP1UJO0
Mesa said in a statement that it may now have to lay off 500 workers at its Freedom Airline subsidiary because 22 of its regional jets will be without work.
Georgia-based U.S. District Judge Clarence E. Cooper prevented Delta from canceling the $20 million-a-month contract in June 2008. Delta said Phoenix-based Mesa wasn't completing enough of its Delta Connection flights. But Mesa argued that was because Delta asked it to cancel many flights out of John F. Kennedy International Airport in New York during bad weather.
Cooper held a trial last month, and in a ruling issued Monday, reversed himself and ruled for Atlanta-based Delta.
Cooper wrote that the contract was clear that a 95 percent completion rate was required and that Mesa hadn't proven any of its legal theories, including that the companies had verbally agreed to modify the terms and not to count weather-related cancellations.
He also ordered Mesa to pay Delta nearly $3 million for overbilling Delta.
"We are extremely disappointed by the District Court's decision," Mesa CEO Jonathan Ornstein said in a statement. "We have at all times sought to act as a good partner and work with Delta as a member of Delta Connection. Unfortunately Freedom's willingness to proactively cancel flights in JFK at Delta's request for the benefit of Delta was held against Freedom and was used as the sole basis to terminate our contract."
A call seeking comment from Delta late Monday wasn't immediately returned.
Mesa filed for bankruptcy protection in January, hoping to shed planes it no longer needs and adjust to drops in air travel due to the economic downturn.
Mesa has been shrinking operations and lost a key United contract for 26 regional jets in December. It now operates 99 aircraft as Delta Connection, US Airways Express and United Express, and independently as Mesa Airlines and go! Mokulele in Hawaii.
http://www.google.com/hostednews/ap/article/ALeqM5gRUufB5uYxxSwY1rUKV-7rJzZrSQD9FP1UJO0
