Comair canceling interviews

[Rabble]

So folks -- Who is buying Comair?

Let's not fool ourselves. Comair has been sold. The question is, to whome?

Republic? Mesa? Horizon? Who has the ability to absorb such a large airline and its 2000 pilots?

 

[jws717]

General electric? that rumor has been floating around......

 

[fugghedabowdit]

David Mueller

 

[DDpaysoff]

General electric? that rumor has been floating around......

I have heard that Delta used Comair assets as collateral for the debt restructuring with GE and that GE will receive those assets if Delta Declares Ch. 11. GE hedged themselves so they would get payment in the form of what I assume to be aircraft instead of going through the court system and battling like everybody else to get paid.

I wouldn't be surprised at all if there is a signifigant downsizing of the airline when delta files. Oh, well, that's the business I guess.

 

[RJ Bum]

David Mueller

That would be funny. Some people flip houses, he flips airlines.

 

[Spinplate]

After the ASA/Skywest deal, Mesa will have the most cash between all the regional airlines. 300million cash money!!!

 

[jws717]

well if it makes anyone feel better the fuel at the corner station went down 10cents from last night. i hope thats a trend

 

[bigshooter]

I would think there would be some rjs parked next to those 737 200s and 767s that will get parked in a chap 11 filing.

 

[Rogue5]

After the ASA/Skywest deal, Mesa will have the most cash between all the regional airlines. 300million cash money!!!

But SkyWest is still sitting on a huge pile of cash, more than most now think...

Delta Sells ASA To SkyWest, Faces Liquidity Pressures This Fall
Aviation Week & Space Technology
08/22/2005, page 44

David Bond
Washington

Sale of ASA to SkyWest will raise cash, but maybe not enough; credit-card contract, loan covenants, pilot retirements test liquidity

Printed headline: Delta's Dire Straits

Delta Air Lines' $425-million agreement to sell Atlantic Southeast Airlines (ASA) to SkyWest Inc. may keep the third-largest U.S. carrier out of Chapter 11 reorganization, but its prospects are highly uncertain and, at best, its brush with bankruptcy will be the closest yet.

Adding $350 million in early proceeds from the ASA sale to the $1.7 billion in ready cash Delta had at the end of the second quarter will leave the carrier with little if any room to spare during the second half of 2005. As described in an Aug. 15 quarterly filing to the Securities and Exchange Commission, Delta expects "a substantial net loss" for the second half, with about $2 billion in payments on aircraft leases, interest and debt maturities, capital expenses and pension-plan contributions.

WORSE, THREE MAJOR factors beyond the $2 billion threaten to tip Delta into insolvency. Its current and prospective future contracts for Visa and MasterCard processing may establish as much as $750 million in cash reserve requirements; liquidity covenants in its principal credit agreements require that it maintain at least $1 billion in unrestricted cash at all times; and its pilots are again retiring early at high rates.

Delta has struggled to stay out of Chapter 11--its closest approach before now came last year, before its pilots agreed to contract concessions that reduced costs and increased revenues by $1 billion per year. This time it's worse. "If our liquidity declines to an unacceptably low level or we conclude that a competitive cost structure cannot be achieved through an out-of-court reorganization, we will need to seek to restructure under Chapter 11 of the U.S. Bankruptcy Code," the carrier told the SEC.

There is less benefit for Delta in selling ASA, one of its two regional subsidiaries, than the price tag suggests. The carrier hopes to close the deal in September, at which point it would receive $330 million of the purchase price and $20 million in aircraft deposits, for a total of $350 million. But under its financing agreements with GE Commercial Finance and other lenders, $100 million would be skimmed off to reduce its debt.

The remaining $95 million from the purchase, plus $30 million more in aircraft deposits, totaling $125 million, might never come Delta's way at all. It will be due four years after closing, provided that Delta stays out of Chapter 11 that long. If Delta files for Chapter 11, SkyWest will owe the money if Delta retains Delta Connection regional service agreements with ASA and SkyWest, which are extended through 2020 as part of the purchase deal. But SkyWest will keep the money if Delta sheds the agreements in bankruptcy proceedings.

 

[viper548]

Looks like SKW still has $300M+ in cash