Mesa enters Delta fold, puts 328Jet talks to rest

 - October 16, 2006, 8:18 AM

Delta Air Lines sent another clear message to its wholly owned affiliates that it won’t hesitate to outsource more regional jet flying to independent partners when it signed Mesa Air Group as the latest Delta Connection carrier last month. The 12-year deal gives Mesa’s Freedom Airlines subsidiary the right to fly up to 30 fifty-seat Bombardier CRJ200s for Delta, the first of which it expects to put into service in October. According to Delta, the contract “provides long-term cost savings and efficiencies gained through Mesa’s attractive operating costs and its complementary fleet of CRJ aircraft.”

Intent on slashing costs from its regional system, Delta has opened RJ bidding to all comers, last year passing over wholly owned subsidiary Comair for new flying in favor of independent carrier Chautauqua Airlines. In February, Comair president Randy Rademacher lost his job after presiding over a disastrous holiday scheduling snafu and failing to move quickly enough to control costs. More recently Delta began entertaining takeover offers for Comair and/or Atlantic Southeast Airlines, notably from St. George, Utah-based SkyWest. Now with the addition of Mesa, Delta holds one more piece of leverage over its established partners.

“This agreement offers long-term cost savings to Delta and makes it economically attractive to upgrade flying that would have been operated with 32-seat Fairchild Dornier aircraft to 50-seat Bombardier CRJs, an aircraft that is more flexible and effective within our network and existing Delta Connection carrier fleet,” said Delta Connection president J.T. Fisher.

After former code-share partner Atlantic Coast Airlines (ACA) left the United and Delta systems to form Independence Air last year, Delta ended all 328Jet service from New York and Boston and announced it would move 10 of ACA’s Boston-based 328Jets to Cincinnati. By that time Delta had entered talks with Milwaukee-based 328Jet operator Skyway Airlines. But those negotiations never led to a contract, however, and last month Skyway confirmed that the talks had ended.

That spells bad news not only for Skyway but also for Independence Air, which is still responsible for the lease payments on 33 idle Fairchild Dornier 328Jets. Nor will it come as welcome news to Leesburg, Va.-based AvCraft Aviation, whose support business depends on active 328s in need of parts and service. Meanwhile, AvCraft Aviation’s now bankrupt manufacturing unit in Germany operates under the control of a court-appointed insolvency administrator, who would like to sell the assets to a single buyer willing to restart production–an increasingly unlikely prospect with scores of low-time pre-owned 328Jets available.