United adding Mesa Air as regional partner in Denver

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02/28/2003 - Updated 09:02 AM ET
United adding Mesa Air as regional partner in Denver

CHICAGO (AP) =97 United Airlines is replacing Air Wisconsin with Mesa Air=20
Group to handle regional flights out of Denver, a step toward United's goal=
=20
of slashing regional carrier costs as it reorganizes in bankruptcy.
Under a five-year agreement announced Thursday, Mesa is expected to operate=
=20
as a United Express carrier out of United's Denver hub beginning in July.=20
Specific routes will be announced later for the 10 Bombardier turboprop=20
aircraft involved, which seat 37 passengers each. The Q200 planes will=20
replace Air Wisconsin's Dornier 328 turboprops, which are being retired.=20
United said Air Wisconsin will continue to provide jet service in the=20
United Express system. In announcing the agreement, United senior vice=20
president Gregory Taylor said Mesa would allow the airline to continue to=20
offer United Express service to medium-sized mountain communities from=
 Denver.

United, which filed for bankruptcy court protection Dec. 9 after more than=
=20
two years of heavy losses, wants to shift more flights to smaller,=20
lower-cost regional jets while paying less for each flight. It plans to=20
trim $100 million or more annually from existing contracts with three=20
United Express partners: Air Wisconsin, Atlantic Coast and SkyWest.=20
Colorado-based airline consultant Michael Boyd said the glut of planes and=
=20
regional carriers on the market allows United to pick and choose as it=20
negotiates new contracts at favorable terms. "United's putting the squeeze=
=20
on everybody," he said. "What United is saying is `Either play ball with us=
=20
or we'll find somebody to replace you with.' United needs them, but they=20
need United." Air Wisconsin and Atlantic Coast =97 small jet carriers=
 heavily=20
dependent upon United's business =97 have been pushing unsuccessfully in=20
bankruptcy court for United to disclose more of its plans for using=20
regional jets. United and United Express carriers combined operate more=20
than 3,300 flights daily.

Shares in United parent UAL Corp. fell 3 cents to close at $1.09 on the New=
=20
York Stock Exchange. Mesa shares rose 22 cents, or 6 cents, to $4 on the=20
Nasdaq Stock Market. Separately, United faces its first key financial=20
benchmark in bankruptcy on Friday when it must show cash losses of no more=
=20
than $964 million from Dec. 1 to Feb. 28. United spokesman Joe Hopkins said=
=20
the required information would be given to the airline's lenders and=20
creditors committee. In recent interviews with newspaper editorial boards,=
=20
United executives have said they were on track to meet the early goal.

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