Originally Posted by
N2rotation
Mesa Air Says To Fight Efforts To Terminate Contract - Update [MESA]
4/1/2008 9:36:36 PM Tuesday, Mesa Air Group, Inc. (MESA) announced that on March 28, Delta Air Lines, Inc. (DAL) notified the company of its intent to terminate the Delta Connection Agreement among Delta, Mesa Air and Mesa's wholly owned subsidiary, Freedom Airlines, Inc. dated as of May 3, 2005.
The Phoenix-based Mesa said 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 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.
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.
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.
Mesa denied there is any basis for terminating the Connection Agreement and said it intended to defend its rights there under. Mesa said though it appreciates Delta's desire to reduce capacity, doing so unilaterally in violation of their was not acceptable to it. 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.
Mesa Air Group Chairman and CEO, Jonathan Ornstein said,” 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."
MESA rose $0.02 or 0.85% and traded at $2.37.
http://www.rttnews.com/sp/breakingne.../2008&item=198
Curious if this is Delta's RJ reduction, or if they will look for a replacement that isn't a criminal bottom feeding company.
because we all know mesa wouldn't violate a contract, nor break the law....heck, we even know they'd let their people take the vacation that they've earned....right...............