Delta Air Lines is shutting down its subsidiary that does ground handling and customer service for its regional carrier flights.
The subsidiary, Regional Elite Airline Services, has about 4,000 employees around the country, though none are in Georgia. Its operations will be taken over by the end of the year by other companies — including another subsidiary, Delta Global Services — which Delta expects will have job opportunities at the same locations for the "vast majority" of workers.
Delta does not expect the move to affect its flight operations.
Although Regional Elite is a Delta subsidiary, it competes against other firms for contracts from Delta. According to a memo to employees from Regional Elite Senior Vice President Don Stephens, Regional Elite's cost structure "kept us from effectively competing," and it recently lost out on work at most locations.
"With very limited opportunities to maintain or grow our business, we will not be a viable company moving forward," Stephens wrote.
"It is a reflection of the current state of the airline industry," Stephens wrote, adding that carriers such as Delta "face incredible cost pressures."
Minneapolis-based Regional Elite was a 2009 spinoff of customer service workers from Delta's regional carrier subsidiaries at the time — Comair and merger partner Northwest's subsidiaries Mesaba and Compass. Delta has since sold Mesaba and Compass and recently decided to shut down Comair.
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