boknowsASA
Well-known member
- Joined
- Mar 21, 2004
- Posts
- 280
This was just posted on USA Today:
Mesa Air woes have it in a 'tricky situation'
Mesa Air woes have it in a 'tricky situation'
Mesa Air Group may be in for a bumpy ride thanks to Delta's efforts to terminate its regional flying contract with Mesa subsidiary Freedom Airlines, The Atlanta Business Chronicle (subscription required) reports. Freedom flies 36 50-seat regional jets under the Delta Connection logo. Mesa has sued to prevent Delta from ending the contract, arguing Delta is unfairly manipulating performance metrics as the grounds for termination. But, if Delta succeeds, Mesa could face a difficult financial situation, according to the Business Chronicle.
"Termination of the contract would jeopardize Mesa as a growing concern and cause Mesa severe and irreparable harm," Mesa alleges in its lawsuit, according to the Business Chronicle. The publication writes Mesa CEO Jonathan Ornstein "stopped short of saying a Mesa bankruptcy was on the table," but he added: "We have a very tricky situation. While I don't think anything is inevitable, this action by Delta has made the situation extremely difficult."
Mesa's problems appear to come on multiple fronts. The Business Chronicle writes "Mesa is already dealing with jittery employees wondering if pink slips are around the corner and airlines unsure if they'll have a partner. … (And) then there are the ticked-off shareholders -- Mesa stock nose-dived in the past year, shedding more than 90% of its value," the publication writes. Adding to Mesa's woes, a court ordered it to pay $80 million to Hawaiian Airlines for unfair business practices, though that amount was later reduced to $52.5 million in a settlement. A similar suit against Mesa –- brought by now-defunct Aloha Airlines -– is still pending.
