DCI RJ Economics

Derg

New Arizona, Il Duce/Warlord
Staff member
From the SLC Chief Pilot Office Bulletin:

IT’S NOT THAT WE DON’T LIKE YOU….Delta Air Lines notified Mesa Air Group that it is terminating the contract under which MAG subsidiary Freedom Air operates seven CRJ900s, alleging that Freedom has failed to maintain specified operational performance outlined in the contract. The timeline for the cancellation was not disclosed. Mesa believes the decision to cut its flying is part of DL's ongoing effort to reduce capacity. Others suggest the move could be in preparation for its planned merger with Northwest Airlines and a possible consolidation of regional airline operations. Delta Connection Senior VP Don Bornhorst insisted that the cuts are being made to ensure a high level of service, not simply to reduce capacity.

MAG will return the CRJs, which it subleases from DL for $1 per month, and DL will have no further financial obligation to Mesa.
 

Derg

New Arizona, Il Duce/Warlord
Staff member
No crap. I could start "Scottsdale Express" for America West and commute on my own airline!
 

jynxyjoe

The Kickin' Chicken!
Lol. My sis lives over in Scottsdale. Need a 'fo let me know. I'll take my lunches at the little Mexican stands (smells bad tastes good).
 

Soul Brotha'

Well-Known Member
Don't worry DL/DCI management are on top of their game. I have more confidence in G.W. Bush's last 4-5 months of leadership, than an Anderson/Bornhorst(sp?) meeting.
 

SeanD

Well-Known Member
This is WAY off topic and I appologize but SoulBrotha just won best avatar of the month. :laff:
 

H46Bubba

Well-Known Member
Yeah I was part of that deal while I was at Mesa. DTO (Delta Tech Ops) was contracted to work on all of MAG's CF-34 engines. My buddy at DTO said that Mesa has not been paying their bills. The term we negotiated with Delta was no more than 30 days for payment to be received. Doh! Man OJ is really digging his hole deeper with with Delta!:cwm27: So as any repair facility will do, if you don't pay they keep the product till payment has been received.
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
Y'know, it would've been great if the memo had started like this:

"Look MAG...it's not you...it's me...."
 

surreal1221

Well-Known Member
Yeah I was part of that deal while I was at Mesa. DTO (Delta Tech Ops) was contracted to work on all of MAG's CF-34 engines. My buddy at DTO said that Mesa has not been paying their bills. The term we negotiated with Delta was no more than 30 days for payment to be received. Doh! Man OJ is really digging his hole deeper with with Delta!:cwm27: So as any repair facility will do, if you don't pay they keep the product till payment has been received.
I have someone very close to the small engine test cell . . .and well. . .those engines are not leaving any time soon. If ever.

Now Pinnacle, those guys pay their bills - on time.
 

H46Bubba

Well-Known Member
I have someone very close to the small engine test cell . . .and well. . .those engines are not leaving any time soon. If ever.

Now Pinnacle, those guys pay their bills - on time.
I couldn't get it out of my buddy as to when the payments stopped. You have any info? My original guess was it might have been when RA gave JO his first kick in the nutts with the ERJ contract cancellation. JO thought he'd get even by not paying DL for his engine repairs. Oh man he's gonna cry to the court more than he did about the ERJ contract, because now it's backfired and will jeopardize his other contracts with UA and US.:rolleyes:
 

wheelsup

Well-Known Member
Just a hunch, but the reason the lease rate is so low is 1) it doesn't matter, if it were $1,000,000/day it would just be built into mesa's cost of the RFP and 2) the lower the lease rate the lower the total margin because we normally operate on "costs + X%" so if the costs are lower the total profit in dollars is lower.
 

higney85

Property of Scheduling
Just a hunch, but the reason the lease rate is so low is 1) it doesn't matter, if it were $1,000,000/day it would just be built into mesa's cost of the RFP and 2) the lower the lease rate the lower the total margin because we normally operate on "costs + X%" so if the costs are lower the total profit in dollars is lower.
I agree with this. Pinnacle gets the -200's free! NWA pays the bill for all our -200's. Keeps the "costs" low.
 

Baronman

Well-Known Member
Just a hunch, but the reason the lease rate is so low is 1) it doesn't matter, if it were $1,000,000/day it would just be built into mesa's cost of the RFP and 2) the lower the lease rate the lower the total margin because we normally operate on "costs + X%" so if the costs are lower the total profit in dollars is lower.
Ding Ding Ding...we have a winner.

This is the same thing when guys moan about Majors paying for their regional partners fuel. Either way, the cost of that gas is going to get passed along to the major carrier. It's probably better if the major who negotiates the fuel contracts takes care of all things related to that.
 
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