ATW Daily News

Delta cancels CRJ900 contract with Mesa subsidiary Freedom Air

Wednesday August 6, 2008

Delta Air Lines notified Mesa Air Group that it is terminating the contract under which MAG subsidiary Freedom Air operates seven CRJ900s, alleging that Freedom has failed to maintain specified operational performance outlined in the contract.

The timeline for the cancellation was not disclosed. Mesa believes the decision to cut its flying is part of DL's ongoing effort to reduce capacity. Others suggest the move could be in preparation for its planned merger with Northwest Airlines and a possible consolidation of regional airline operations.

"We are disappointed to see [that] Delta now appears to have chosen a different approach with its regional airline partners," MAG Chairman and CEO Jonathan Ornstein said.

Delta Connection Senior VP Don Bornhorst insisted that the cuts are being made to ensure a high level of service, not simply to reduce capacity. "Our tolerance is not like it has been in the past," he told ATWOnline. "There are expectations on what the product will look like at mainline and regionals. We've been aggressive in making sure everyone understands the expectations."

MAG will return the CRJs, which it subleases from DL for $1 per month, and DL will have no further financial obligation to Mesa.

by Sandra Arnoult

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