SkyWest in $25 million Dispute with DL

SkyWest Inc filed suit against Delta last week in a dispute of a $25 million payment SkyWest and its sister airline Atlantic Southeast Airlines said its major partners owed to it regarding payments made to passengers owing to irregular operations (IROP). Delta unilaterally withheld a combined total of approximately $25 million (pretax) from one of the weekly scheduled wire payments to SkyWest Airlines and ASA during December 2007. Delta indicated that it does not believe the majority of IROP expenses SkyWest Airlines and ASA have paid on behalf of customers is reimbursable under the Delta Connection Agreements. SkyWest, Inc. filed the complaint in Superior Court of Fulton County, Georgia,
“Although we and Delta are both committed to maintain a productive and cooperative long-term relationship and remain focused on continued improvements of our Delta Connection operations, we simply have a disagreement over the IROP contract language,” said Bradford R. Rich, executive vice president and CFO of SkyWest, Inc. “However, due to the inability to resolve the matter informally, we are seeking legal remedies to protect our contractual rights under our agreements.”