Watch CBSN Live

Delta Tells Mesa to Take Its 50 Seaters Elsewhere

Airlines have made it quite clear that they have little interest in keeping 50 seat jets around. Shockingly (yeah, right) the combination of high fuel costs and 50 seats doesn't really work very well from a per-seat cost perspective. Now, Delta has come up with a unique way to drop 50 seaters: invoke the non-performance clause.

It shouldn't surprise many followers of this industry to know that Mesa is not exactly a leader in performance. For the 12 months ending January 2008, the airline completed 73.0 percent of flights on-time, good enough for 11th place (out of 20 reporting airlines). That doesn't sound so bad, but most of Mesa's flying for Delta (actually flown by subsidary Freedom Airlines) is in Atlanta and at New York/JFK where the airline has had worse performance.

For example, in January 2008 (latest data available), Mesa aircraft arrived on time 68.7 percent of the time overall, but only 60.6 percent at Atlanta and a dismal 49.4 percent at JFK, by the far the worst performance at that airport. What's worse? The airline canceled 6.5 percent of all flights in January. That's almost a full point more than the next worse airline.

With that in mind, it's no surprise that Delta would try to use this performance as a way to shed the airline of some 50 seaters. Specifically, Delta says that Mesa has not met its completion rate goals for the 36 strong ERJ-145 fleet for three of the months during the six month period between September 2007 and February 2008, and that's grounds for divorce.

Mesa, predictably, isn't taking this lying down. The airline shot back and claimed that the reason the cancellation rate was so high was that Delta made them cancel flights. It's common in the industry for airlines to cancel flights on smaller jets when the airport's capacity is constrained (usually due to weather), because they'd rather get the big jets out since more passengers are impacted. But could this really all be Delta's fault? I doubt it.

Delta management couldn't have thought they'd get away with deliberately setting one of its regional airlines up to fail, especially when that airline is Mesa. Mesa's CEO Jonathan Ornstein is not someone who would let something like that slip, and Delta knows it. So something tells me that there has to be more to this. Either that or Delta is really playing with fire.

It does make me wonder if other airlines are contemplating the same thing. If you look at the flights in the US that were delayed more than 80 percent of the time in January, more than a quarter of them were on Mesa. What's more interesting is that each one of those flights was going to or from Chicago/O'Hare as United Express. I don't know the details of United's contract, but might they be looking to do something similar if they can? It would certainly be a good way to reduce capacity.