Mesa #1 - Official evidence

[WayBack]

I think you guys are looking at the Freedom/Delta relationship all wrong.

Don't argue about on-time metrics or customer satisfaction statistics: it never mattered. Freedom was there to diversify away from Comair and the "old" ASA -- to drive a wedge in negotiations and scatter their ops so that another 2000-style strike could never happen again.

After all, who was in MCO before Freedom took over?
And now in CVG?

So why argue about who was/is/could be/should have been #1 on time in the Delta system. Management has waved the "mission accomplished" banner and is moving on.

Take a picture people, this is what "sense" looks like. It only comes once every 63yrs on FI.com

 

[nerjdriver]

True. You can do that when CO is helping with the bills, though.

CO is helping with the bills huh. Think you need to do some research on that Walter.

You are WAY OUT of your element.

 

[Mike man]

...who was in MCO before Freedom took over?

Comair, ASA and Chautauqua...why?

 

[B.T.Justice]

Please trust me on this, NONE of these things are happening. Do you think for one second that if Delta thought we were cheating on any metric, particularly on metrics for which they pay incentives, that they wouldn't send an army of auditors to prove it and then run to court to get their money back?

Yep, I think they would...and in fact, they are. Delta filed their brief with the bankruptcy court on 2/4. Lets have a look:


5. The Delta Connection Agreement obligated Freedom and Mesa to invoice Delta on a monthly basis for amounts they were entitled to receive under the terms of the Delta Connection Agreement, but no more. Freedom and/or Mesa had an express contractual obligation to ensure that their invoices were accurate and in compliance with the Delta Connection Agreement. Freedom and Mesa also had an express contractual duty to accurately report operational data, including Freedom’s completion rate, to Delta on a daily basis.

6. One type of compensation potentially available to Freedom and
Mesa under the Delta Connection Agreement was the “Base Mark-Up.”
Freedom and/or Mesa were eligible to receive the Base Mark-Up for a
particular month only if Freedom completed at least 95% of the flights
scheduled pursuant to the Delta Connection Agreement for that particular
month. Freedom and/or Mesa were also potentially entitled to additional
incentive compensation on a monthly basis if Freedom met additional
performance criteria.

7. The Delta Connection Agreement expressly provides that, for
purposes of calculating Freedom’s completion rate, flights completed four or more hours late and flights flown with no revenue passengers are not to be counted as completed flights. Thus, in preparing invoices pursuant to the Delta Connection Agreement, Freedom and Mesa were not permitted to count such flights as having been completed for purposes of determining whether Freedom and/or Mesa were eligible to receive the Base Mark-Up or any other incentive compensation.

8. Prior to the termination of the Delta Connection Agreement, Freedom and/or Mesa regularly reported to Delta that Freedom’s completion rate met or exceeded 95%. Thus, Freedom and/or Mesa regularly billed Delta for the Base Mark-Up and, on occasion, additional incentive compensation. The Base Mark-Up for which Freedom and/or Mesa billed Delta regularly amounted to several hundred thousand dollars per month. Prior to January 2008, Delta regularly paid Freedom’s and/or Mesa’s invoices, including the Base Mark-Up and, at time, other incentive compensations, in good-faith reliance upon the accuracy and completeness of the operational data and invoices supplied by Freedom and/or Mesa.

9. The Delta Connection Agreement permits Delta to “audit and inspect Operator’s books and records with respect to services provided hereunder, the service levels achieved, and the determination of charges due pursuant to this Agreement” for the purposes of auditing compensation paid to Freedom and/or Mesa, including “any Mark-up or incentive compensation due or paid hereunder.”

10. In March 2008, Delta conducted a review of Freedom’s and Mesa’s invoices. Delta discovered that Freedom and/or Mesa’s reporting of Freedom’s completion rate was not in compliance with the Delta Connection Agreement. In particular, Freedom and/or Mesa were counting flightscompleted four or more hours late, and flights flown with no revenue passengers, as completed flights when calculating Freedom’s completion rate. The express terms of the Delta Connection Agreement, however, provide that such flights are not to be counted as completed flights.

11. Freedom’s and/or Mesa’s improper classification of such flights as completed flights was improper and rendered their reporting of completion rate materially inaccurate. When Delta corrected Freedom’s and/or Mesa’s calculations, it found that Freedom’s monthly completion rate was often below the contractual minimum required to be eligible for the Base Mark-Up and/or additional incentive compensation. Thus, for those months, Freedom and Mesa were not entitled to request or receive the Base Mark-Up or any other incentive compensation.

12. Freedom and Mesa have billed Delta for the Base Mark-Up and additional incentive compensation in violation of the Delta Connection
Agreement and systematically overbilled Delta. Until March 2008, Delta
paid those inflated invoices without knowing of the Plaintiffs’ improper
billing practices.

Rene- the army of auditors is on the way - and they want their money back!

 

[Raoul Duke]

You understand they lost on each of the points above? The court found that Delta had modified the agreement and that Mesa had correctly billed. Delta was found to have acted in bad faith and the court also found that Delta's witnesses were not credible. Delta appealed the decision and lost. I am not sure how effective quoting a losing argument is.

 

[B.T.Justice]

I think you need to check your facts. This is from the brief Delta filed on 2/4/2010 with the bankruptcy court. Mesa was issued a stay in the Georgia court, not a victory.

 

[WalterSobchak]

CO is helping with the bills huh. Think you need to do some research on that Walter.

You are WAY OUT of your element.

Far fetched, maybe...but, dig a little deeper, homeskillet. These days, it's all about reduction of "tail-risk" when it comes to the 50-seat world...and CO holds the leases on a bunch of those Xjet airframes.

 

[Nevets]

Wrongo Bongo. Expressjet is the new undercutter.

Can you provide a source?

True. You can do that when CO is helping with the bills, though.

That was part of the crapy deal SKW made with CAL that XJT was forced to sign. Thanks for that.

Far fetched, maybe...but, dig a little deeper, homeskillet. These days, it's all about reduction of "tail-risk" when it comes to the 50-seat world...and CO holds the leases on a bunch of those Xjet airframes.

CAL's pilots have a scope that they will not relinquish. CAL knows this and therefore they don't have as much "tail-risk" you speak of when it comes to the 50-seat world. CAL holds the head lease on all those aircraft.

 

[WalterSobchak]

CAL holds the head lease on all those aircraft.

I wasn't sure if it was still the entire fleet.

 

[Nevets]

I wasn't sure if it was still the entire fleet.

Well, not the entire fleet. They own about four of them.