Mesa Air says to fight Delta plan to quit contract

NEW YORK (Reuters) - Mesa Air Group Inc (MESA.O) on Tuesday said it plans to contest Delta Air Lines Inc's (DAL.N) plan to terminate a contract with its Freedom Airlines Inc unit.

Phoenix-based Mesa said Delta notified it on March 28 of its intent to terminate a connection agreement with Freedom dated May 3, 2005.

It said Delta alleged that Freedom failed to complete a specified number of flights on ERJ-145 jets during three months of the six-month period ending in February. Mesa said the notice would allow Freedom to provide connection services to Delta while the airlines work out a "transition agreement."

Mesa said it intends to defends its rights under the contract. "Delta's effort to terminate the agreement will not be upheld in a court of law," Mesa Chief Executive Jonathan Ornstein said in a statement.

Gina Laughlin, a spokeswoman for Atlanta-based Delta, said the carrier decided to terminate the contract "due to operational performance. We expect the operational pulldown to be orderly and have minimal impact to our customers."

Freedom's connection agreement with Delta governing larger CRJ-900 jets is not affected, both carriers said.

Embraer (EMBR3.SA) builds ERJ-145 jets, while Bombardier Inc (BBDb.TO) builds the CRJ-900 jets.

Delta on March 18 announced plans to cut 2,000 jobs and scale back flights, in the wake of rising fuel prices and a weakening economy. It said it plans to take 15 to 20 mainline aircraft and 20 to 25 regional jets temporarily out of service to reduce capacity.

Mesa said it operates 182 aircraft. Freedom operates mainly in the U.S. southeast, according to Mesa's Web site.

(Reporting by Jonathan Stempel; Editing by Gary Hill)