Delta tells Pinnacle it plans terminate contract; regional calls action 'drastic'

Delta Air Lines yesterday told regional partner Pinnacle Airlines that the capacity purchase agreement the two carriers signed in April 2007 will be terminated as of July 31, claiming that the Memphis-based airline has failed to meet ontime performance standards.

The 10-year agreement called for Pinnacle to operate up to 16 CRJ900s on behalf of DL. It already has taken delivery of nine new aircraft of the type to support the flying and reacted strongly to DL's stated intention to withdraw from the deal. "We are extremely surprised and disappointed that Delta is attempting to take this drastic and improper action," Pinnacle President and CEO Phil Trenary said. "From the very beginning of our Delta Connection operations, we expressed our concern that the flight schedules Delta created were unrealistic."

Trenary claimed that recent schedule changes have resulted in an improvement in Pinnacle's ontime performance, which even before that was "well above the agreed minimum standards." He said the regional would "pursue appropriate remedies" if the contract is cancelled.

This marks the latest effort by DL to shed a contract with a regional partner. In April it announced it would end its agreement with Mesa Air Group subsidiary Freedom Airlines, which operates 34 ERJ-145s on Delta Connection flights. But Mesa won a preliminary US court injunction in May that prevented DL from pulling the plug. Industry sources suggested that this could be part of DL's overall strategy to cut capacity to pave the way for its proposed merger with Northwest Airlines.

Pinnacle with subsidiary Colgan Air operates a fleet of 138 RJs and 57 turboprops in partnership with Delta Connection, Northwest Airlink, Continental Connection, United Express and US Airways Express.