Dav8tor
Well-known member
- Joined
- Jan 29, 2002
- Posts
- 131
By dhenderson
Created 2010-05-18 21:42
By Aaron Karp [1]
A US federal judge ruled that Delta Air Lines can terminate its contract with Mesa Air Group subsidiary Freedom Airlines covering 22 ERJ-145s, reversing a prior preliminary injunction that had stopped DL from ending ties to the regional.
According to media reports, Mesa also was ordered to repay DL $3 million for overbilling the carrier. MAG Chairman and CEO Jonathan Ornstein said in a statement that the company is "extremely disappointed" by the decision and warned that 500 employees likely would have to be cut as a consequence of the ruling.
DL asserted that Freedom breached its contract by failing to reach a 95% completion rate on Delta Connection flights. But MAG argued that it cancelled flights at New York JFK "at Delta's request during periods of operational irregularity (bad weather and ATC delays)…in order to make way for Delta's larger jets." It said DL turned around and "retroactively held [the cancelled flights] against Freedom for purposes of calculating its minimum flight completion factor."
MAG said it is "evaluating options going forward" following the ruling. The judge stated that the DL-MAG contract was clear in calling for a 95% completion rate and that there was no adequate legal reason provided by MAG why Freedom didn't hit the target.
Ornstein said, "Unfortunately Freedom's willingness to proactively cancel flights at 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. It is disheartening that our company and people will be punished retroactively for taking actions in good faith at Delta's direction." MAG is currently operating under Chapter 11 bankruptcy protection (ATWOnline, Jan. 6 [2]).
