Mesa-Frontier partnership best described as frosty

 - May 9, 2008, 5:46 AM

Less than nine months into a pro-rate code-share contract with Frontier Airlines that called for the introduction of seven Bombardier CRJs into the Frontier system by year-end, Mesa Air Group has begun to curtail its relationship with the Denver-based low-fare carrier as a lingering environment of razor-thin yields has resulted in “less than satisfactory” returns for Mesa, according to a company official.

The Phoenix-based regional airline has already canceled its Frontier JetExpress service from Denver to Minneapolis and St. Louis and reduced frequencies from three round trips to one on routes to San Jose and Houston. Although on October 22 it opened a new route for Frontier between Denver and Oakland, Calif., Mesa has removed one of the six 50-seat CRJs it had placed into its Frontier system.

According to Mesa, its contract with Frontier allows either party periodically to adjust frequencies and/or exit markets. Nevertheless, Mesa would like to replace its pro-rate formula with a more predictable cost-plus deal similar to those under which it flies for US Airways and America West.

Perhaps not coincidentally, Mesa and US Airways have tentatively agreed to expand their code-share contract to include the addition of twenty 50-seat regional jets into the US Airways Express fleet next year. However, where Mesa gets those extra airplanes remains an important consideration, given the lack of delivery slots available next year and financing obstacles associated with the bankruptcy of US Airways.

Although last month a bankruptcy court approved a motion filed by US Airways to continue and augment its existing code-share relationship with Mesa, the establishment of a firm deployment schedule depends on aircraft availability. A temporary solution could involve the use of airplanes originally slated for the Frontier system for the expanded US Airways deal.

Frontier v-p of communications Elise Eberwein told AIN that Mesa has not formally sought a renegotiated contract, but admitted that the relationship has presented its “challenges.”

“Our relationship with [Mesa] is different from the others they maintain,” said Eberwein. “To make any type of relationship work requires a certain level of expertise. Whether it’s a revenue-sharing agreement or a cost-plus deal, smart companies work together as partners to agree on adjustments. We are willing to work with our partner. Mesa has to be willing to work with us.”