eolesen
Veteran
- Jul 23, 2003
- 15,940
- 9,371
Mesa Air Group, Inc. (the "Company") today announced that on March 28, 2008, Delta Air Lines, Inc. ("Delta") notified the Company of its intent to terminate the Delta Connection Agreement among Delta, the Company, and Mesa's wholly-owned subsidiary, Freedom Airlines, Inc. ("Freedom"), dated as of May 3, 2005 (as thereafter amended, the "Connection Agreement"). Delta seeks to terminate the Connection Agreement as a result of Freedom's alleged failure to maintain a specified completion rate with respect to its ERJ-145 Delta Connection flights during three months of the six-month period September 2007 through February 2008
. The notice issued by Delta is accompanied by a proposed temporary agreement pursuant to which Freedom would continue to provide Delta Connection services while the parties discuss the terms of a transition agreement. This termination does not affect Freedom's CRJ-900 Delta Connection flying. Mesa vehemently denies there is any basis for terminating the Connection Agreement and intends to vigorously defend its rights thereunder.
The alleged failure to maintain the specified completion rate in the contract is due to Delta's own request of Mesa to remove flights to benefit Delta's overall operation and/or to accommodate Delta mainline flights. These flights, among others, have always been taken out of Freedom's performance calculations in the past and Delta acted consistent with this practice and has paid Mesa both its base margin and its incentive margin after crediting Mesa for the Delta mandated schedule changes and /or cancellations.
We appreciate Delta's desire to reduce capacity as they publicly announced on March 18, 2008, but to do so unilaterally and in patent violation of their contract is not acceptable. There was no indication at any time from anyone at Delta that there was a potential issue and the notice comes as a total surprise to Mesa.
"We are confident that Delta's actions are not supported by the terms of the Connection Agreement, that we have complied with all of our obligations under that agreement, and that Delta's effort to terminate the agreement will not be upheld in a court of law." said Mesa Air Group Chairman and CEO, Jonathan Ornstein.
. The notice issued by Delta is accompanied by a proposed temporary agreement pursuant to which Freedom would continue to provide Delta Connection services while the parties discuss the terms of a transition agreement. This termination does not affect Freedom's CRJ-900 Delta Connection flying. Mesa vehemently denies there is any basis for terminating the Connection Agreement and intends to vigorously defend its rights thereunder.
The alleged failure to maintain the specified completion rate in the contract is due to Delta's own request of Mesa to remove flights to benefit Delta's overall operation and/or to accommodate Delta mainline flights. These flights, among others, have always been taken out of Freedom's performance calculations in the past and Delta acted consistent with this practice and has paid Mesa both its base margin and its incentive margin after crediting Mesa for the Delta mandated schedule changes and /or cancellations.
We appreciate Delta's desire to reduce capacity as they publicly announced on March 18, 2008, but to do so unilaterally and in patent violation of their contract is not acceptable. There was no indication at any time from anyone at Delta that there was a potential issue and the notice comes as a total surprise to Mesa.
"We are confident that Delta's actions are not supported by the terms of the Connection Agreement, that we have complied with all of our obligations under that agreement, and that Delta's effort to terminate the agreement will not be upheld in a court of law." said Mesa Air Group Chairman and CEO, Jonathan Ornstein.
