updated 2/15/2005 6:09:42 PM ET 2005-02-15T23:09:42

The U.S. Postal Service has stopped using American Airlines and US Airways to deliver domestic mail because the carriers failed to meet performance goals, including on-time delivery.

The post office said the suspension took effect Saturday and covers first-class mail and some small packages shipped priority class.

Airline and post office officials said they were talking and hoped to settle the dispute.

Jim Quirk, a Postal Service spokesman, said Tuesday the agency notified the airlines in December that "we needed a plan from them to meet the goals" for on-time delivery. He said the post office was optimistic that the two airlines could make corrections and soon be carrying mail again.

Fort Worth-based American, a unit of AMR Corp., said that its contract remained in force, but spokesman Tim Wagner added, "We are talking with them about aspects of our business relationship and ways to improve our performance."

Wagner said American didn't view the post office's action as a suspension of its contract but rather the agency exercising its right to control the amount of mail it sends on American's jets.

That amount "is down from what has been standard in the past," he said.

In a message to employees obtained by The Associated Press, American officials said they met with Postal Service representatives on Monday.

Dave Brooks, the airline's president of cargo, said in the memo that the "financial attractiveness of carrying domestic mail has declined" over the years because of price competition. While other airlines stopped or reduced their mail shipments, American thought it could make a profit, he said.

US Airways Group Inc. spokesman David Castelveter said airline officials met Tuesday with the post office and believe they can settle their differences.

Castelveter said US Airways' on-time performance declined due to an "operational meltdown" at its Philadelphia hub over the Christmas holidays that caused flight cancellations. The airline has revamped its schedule and hired more workers in Philadelphia.

John Bonafilia, manager of the commercial air operations for the post office, estimated that American carried about 10 percent of domestic mail. He did not offer an estimate of US Airways' load.

Quirk said the post office had shifted mail from American and US Airways to other carriers _ most major airlines also carry mail except Northwest Airlines Corp. and Frontier Airlines Inc., which opted out for financial reasons. Cargo shippers FedEx Corp. and United Parcel Service Inc. are also used.

"That mail is going to other carriers, and there will be no delays in the mail," Quirk said.

The loss of service for the post office could cost the carriers millions of dollars at a time when airlines are squeezed by higher costs and limited ability to raise fares.

American was paid $22.5 million for domestic and international mail delivery in the third quarter of last year. American and US Airways said their international mail delivery business was not affected.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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