Delta Shoves ASA Aside to Consolidate Atlanta Ground Operations

After years of watching Atlantic Southeast Airlines trail the pack in customer service rankings, Delta Air Lines said it plans to take over the "Delta Connection" carrier's ground operations at the Atlanta airport.

Delta said it expects to start running ASA gates, baggage handling, aircraft cleaning and most other nonflying tasks as of June 1.

The move means Delta will likely have to add a large number of employees at the Atlanta airport, although the company said it has not determined how many. A Delta executive said he expects the "vast majority" to come from ASA's operations.

ASA currently has about 1,400 employees in Atlanta ground operations.

The decision, announced Friday, comes as Delta said it remains on track to emerge from bankruptcy this spring despite reporting a $109 million loss in January, typically one of the slowest travel months.

It came as a surprise to ASA, owned by Utah-based SkyWest Airlines, which also provides contract flying for Delta.

"This is not a good news story for our folks," said ASA President Bryan LaBrecque. "We are very disappointed."

Delta said ASA hasn't made enough progress at fixing chronically late flights and high baggage complaints.

"When a customer buys a ticket from Columbus to Los Angeles, they are buying a Delta ticket," said Joe Kolshak, Delta's executive vice president of operations.

"This really is nothing more than Delta making the decision we need to provide consistent service."

ASA, which has often had the highest rate of lost luggage reports per passengers in monthly government reports, started a campaign late last year to improve its performance by adding workers and buying more equipment.

LaBrecque said those efforts have been working, boosting the airline's performance.

ASA rose to 10th place in December in the U.S. Department of Transportation's monthly rankings for on-time performance, from 20th or so during much of the year.

ASA was 16th out of 20 carriers in terms of baggage complaints in December.

"We have clearly seen some tremendous improvement," LaBrecque said.

Not enough, said Kolshak, given that Delta's total operations in Atlanta are expected to increase this year. He expects up to seven contract carriers to be operating daily flights for Delta out of Atlanta this year, up from four.

"We believe that this is the best step," said Kolshak.

ASA was an independent contract carrier for Delta until Delta bought it in 1999 --- citing as one reason the need to improve its service. ASA operated as a Delta subsidiary with a separate work force, and it was usually below average in DOT rankings under Delta ownership.

Delta sold ASA to SkyWest in a cash-raising move before filing for bankruptcy protection in 2005.

Kolshak said he thinks Delta's current management team will get better results with all-Delta ground crews.

"We kept them separate in the past. In retrospect, that may have been a mistake," he said.

Also Friday, Delta said its $109 million loss for January was an improvement from a $300 million loss during the same period in 2006.

Delta's operating loss was $65 million in January, an $81 million improvement from the previous year's period, according to Delta's monthly operating report to the bankruptcy court.

"January's results were in line with our plan, for what is typically Delta's slowest travel month," Chief Financial Officer Ed Bastian said in a news release.

"We remain on track to emerge from bankruptcy as a strong, healthy and independent global carrier this spring."

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