SkyWest (NASDAQ: SKYW) announced that it has entered into a Capacity Purchase Agreement (“CPA”) with Delta Air Lines (NYSE: DAL) to operate 19 new Embraer E175 dual-class regional jet aircraft. SkyWest has determined that these 19 E175 aircraft will be operated by SkyWest Airlines, Inc. a wholly-owned subsidiary of SkyWest. The CPA is under terms and conditions similar to SkyWest’s existing Delta agreements.
“SkyWest is a longtime Delta partner, and we’re pleased to advance our partnership with an additional aircraft type,” said Chip Childs, SkyWest, Inc. President. “As we continue to evolve our fleet mix, we look forward to continuing to deliver what our partners need through solid, reliable service.”
The aircraft will be flown in dual-class configuration of 76-seats, and will be equipped with Wi-Fi. Under the agreement, it is anticipated that delivery of the aircraft will begin in August 2016, with all 19 aircraft being delivered by mid-2017.
Delta Air Lines Inc. has sued regional contractor Republic Airways Holdings Inc., saying the carrier failed to supply a full schedule of flights as promised.
Indianapolis-based Republic has been unable to fulfill an unspecified number of flights for Delta’s regional operation, Delta Connection, according to the suit filed Monday in state court in Atlanta. That led Delta to find replacement flights and occasionally re-book passengers and issue refunds, costing direct damages exceeding $1 million, Delta said in the suit.
Republic’s Shuttle America Corp. unit is one of several regional carriers that transport passengers from small airports to Delta’s large hubs. Delta spokesman Michael Thomas declined to comment on the suit Tuesday. Last month, he said Shuttle America operates 309 daily flights for Delta Connection.
Republic said on July 24 that its standoff with pilots over a new contract was hurting operations, sending the shares down and causing the company to lose more than half its market value the next trading day. The lack of such an agreement exacerbated its pilot shortage, the company said, and threatened to force the company into a court-supervised restructuring. The two sides reached a tentative agreement late last month, easing worries of bankruptcy.
Delta’s lawsuit, heavily redacted to conceal contract information, said Shuttle America operates 71 aircraft for Delta Connection, a mix of 50-seat, 70-seat and 76-seat Embraer SA planes. Delta faults the company for making its pilot shortage worse by agreeing in September 2014 to take on additional flying for United Continental Holdings Inc.’s regional operation.
Delta is seeking damages, including loss of profits and other costs. A Republic spokesman didn’t immediately return a phone call.
Indianapolis Business Journal