Delta suing Greenbrier resort over flight service

The Associated Press

CHARLESTON, W.Va. — Delta Airlines is accusing a West Virginia resort of failing to pay for flight services from Atlanta and New York City.

A breach-of-contract lawsuit filed by the airline against The Greenbrier resort in White Sulphur Springs seeks $4 million in damages. The lawsuit was recently transferred to U.S. District Court in Atlanta from Georgia state court.

The lawsuit says The Greenbrier guaranteed Delta would receive certain minimum revenues for providing service from June 2010 to June 2011 between the Greenbrier Valley Airport near Lewisburg and both Hartsfield-Jackson International Airport and New York's LaGuardia Airport.

Greenbrier owner Jim Justice had said expanded air service to the resort was needed due to the 2010 debut of the PGA Tour's Greenbrier Classic and the July 2010 opening of an $80 million underground casino. The Greenbrier also is served by Continental flights from Cleveland.

Delta operates a 50-seat regional jet on both the Atlanta and New York flights. Court documents show the Atlanta-based flights drew an average of 30 passengers in the one-year span ending in June 2011, while the New York-based flights drew 15 passengers per flight.

Delta says the actual revenues were $4 million below the minimum revenues guaranteed for the two flights over the one-year period and the resort was required to remit the difference to the airline. Delta wants to use a $1 million letter of credit from The Greenbrier that could be deducted from the damages.

Jeff Kmiec, The Greenbrier's president and managing director, didn't immediately return a telephone message Tuesday.

The lawsuit was first reported by The Charleston Gazette.

Faced with a $13 million deficit, the posh resort laid off more than 100 of its 1,800 workers earlier this month. The layoffs include hourly workers as well as top managerial positions.

Justice cited a traditional slowdown in the winter months and said he hoped to rehire most of those laid off by April 1.

A former coal executive, Justice has been sinking his personal fortune into renovating and revitalizing the National Historic Landmark since he bought the property from CSX Transportation for $20.1 million in 2009.

In addition to the casino and hosting the golf event, he's ordered extensive renovations, created new partnerships and launched new ventures.

Justice is teaming up with several physicians and a health care developer to build the $250 million Greenbrier Medical Institute, featuring a sports medicine and rehabilitation center, and a cosmetic surgery center with a "lifestyle enhancement academy."

This summer, Justice plans to launch The Greenbrier Presidential Express, a luxury train service from Union Station in Washington, D.C., at a round-trip price of $650.