Mesa Challenges Delta's Efforts to Terminate Contract
PHOENIX, April 1, 2008 /PRNewswire-FirstCall/ -- Mesa Air Group, Inc.
(Nasdaq: MESA) (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.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990210/LAW065)
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.
Mesa currently operates 182 aircraft with over 1,000 daily system
departures to 157 cities, 42 states, the District of Columbia, Canada, the
Bahamas and Mexico. Mesa operates as Delta Connection, US Airways Express and
United Express under contractual agreements with Delta Air Lines, US Airways
and United Airlines, respectively, and independently as Mesa Airlines and go!.
In June 2006 Mesa launched inter-island Hawaiian service as go!. This
operation links Honolulu to the neighbor island airports of Hilo, Kahului,
Kona, Lihue, Moloka'I and Lana'I. The Company, founded by Larry and Janie
Risley in New Mexico in 1982, has approximately 5,000 employees. Mesa is a
member of the Regional Airline Association and Regional Aviation Partners.
This press release contains various forward-looking statements that are
based on management's beliefs, as well as assumptions made by and information
currently available to management. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable; it
can give no assurance that such expectations will prove to have been correct.
Such statements are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, estimated, projected or expected. The Company does not
intend to update these forward-looking statements prior to its next filing
with the Securities and Exchange Commission.
SOURCE Mesa Air Group, Inc.
Brian Gillman, General Counsel, +1-602-685-4051, for Mesa Air Group, Inc.
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