It's not really a blow to DL. There's no way that DL could bid as low as AAI can. AAI's cost structure is vastly lower than DL's. DL didn't even make a big effort to get the contract.
AAI won a contract for a piece of Florida's intrastate flying as well...after bragging how AAI would bring in 717's. Now, AAI has turned around and will downgrade most of the flights to RJ's.