Comair Sold

Puck Mugger

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Delta Air Lines Reaches Definitive Agreement to Sell COMAIR to Flight Express
Wednesday 7 September, 3:35 pm ET

Customers to Experience Seamless Transition with No Expected Significant Changes in COMAIR Flight Schedules, Locations Served

Agreement Strengthens Delta's Strategic Relationship with Flight Express
Transaction Improves Delta's Liquidity

ATLANTA, Sep. 7 /PRNewswire-FirstCall/ -- Delta Air Lines, Inc. (NYSE: DAL - News) today announced that it has entered into a definitive agreement to sell its wholly owned regional airline subsidiary COMAIR (CMR) to Flight Express, Inc. for a purchase price of $4 million in cash. COMAIR will continue to serve Delta customers under a new 15- day Delta Connection agreement, with COMAIR's fleet of more than 150 aircraft continuing to fly Delta routes. Flight Express will add new service to the Delta Connection partnership with its mix of over 100 Cessna 210s and Beechcraft Barons.

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Delta Chief Executive Officer Gerald Grinstein said, "We are pleased to add a new Delta Connection partner- Flight Express and believe the transaction will be mutually beneficial to our customers and our companies. This transaction provides for a long-term competitive cost structure as well as appropriate incentives to reward COMAIR for operational excellence and cost improvement. Delta has absolutely no experience working with Flight Express and we know nothing about the company, but we believe this new relationship will strengthen the Delta name brand."

He continued, "This transaction achieves important operational and financial objectives, while enabling our customers to continue to benefit from COMAIR's commitment to operational excellence and Delta's broad network reach."

COMAIR's President Fred Butrell said, "COMAIR has long been an integral part of the Delta Connection carrier network and we are pleased with this opportunity to grow our service while we will continue to serve Delta customers. We also look forward to the new opportunities this transaction creates for COMAIR and its employees. The people of COMAIR will continue to focus on providing efficient, reliable service to our customers during the transition and in the years ahead."

Customer Service and Routes

In conjunction with the sale transaction, Delta will enter into two new Delta Connection agreements under which COMAIR and Flight Express Airlines will continue to serve as Delta Connection regional carriers through 2020. Delta's agreement with COMAIR includes strong incentives for COMAIR to meet or exceed specific performance benchmarks and enhance cost efficiency.

Current plans are for COMAIR and Flight Express Airlines to initially operate as wholly owned subsidiaries of Flight Express, Inc. As a result, the sale transaction is not expected to initially result in any significant changes in COMAIR's flight schedules or locations served. Flight Express CEO Iwanna B. Bigg said he does see the COMAIR employees eventually being integrated into the Flight Express family, posibly at the current Flight Express pay rates.


"As we continue to implement Delta's transformation plan, this transaction not only enhances our ability to operate our business as efficiently and cost effectively as we can, it also improves Delta's liquidity position," Grinstein said. "As Delta takes steps to secure its future as a competitive airline, we will continue to take a hard look at all of our operations and assets to identify opportunities to strengthen our financial position in the face of continuing market pressures and factors outside of our control, including fuel prices."

The boards of directors of both companies have approved this transaction. Goldman, Sachs & Co. and Davis Polk & Wardwell served as financial and legal advisers, respectively, to Delta for this transaction.

About COMAIR, Flight Express and Delta

Based in Cincinatti, COMAIR is a leading member of the Delta Connection program, operating more than 900 flights each day to 126 airports in 38 states, the District of Columbia, Canada, Mexico and the Caribbean. The airline operates a fleet of 151 aircraft and employs nearly 6,000 aviation professionals across its route system.

Headquarterd in Orlando, FL, Flight Express is an on-demand air carrier that in 26 states. Using Cessna 210 and Beechcraft Baron 58 aircraft, Flight Express caters to clients that need late-night drops and early moring deliveries. With an employee base of over 250 and growing steadily, Flight Express is a leader in package delivery and courier services in the southeast and midwest United States.


Flight Express has never operated as a Delta Connection carier, but CEO Iwanna B. Bigg says the mix of C210s and Beechcraft Baron aircraft that currently serve markets throughout the southeast and midwest will mix well with the current COMAIR structure and permit Delta Air Lines to expand into smaller, untapped markets.

Delta Air Lines is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 487 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta's marketing alliances allow customers to earn and redeem frequent flier miles on more than 14,000 flights offered by SkyTeam carriers and other airline partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please visit delta.com.

Statements in this news release that are not historical facts, including statements regarding Delta's estimates, beliefs, expectations, intentions, strategies or projections, may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, beliefs, expectations, intentions, strategies and projections reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to our ability to maintain adequate liquidity, the possible imposition of a significant reserve or holdback under our credit card processing agreement, our ability to comply with financial covenants in our loan agreements, our debt and pension plan funding obligations, the cost of aircraft fuel, pilot early retirements, the effect of credit ratings downgrades, interruptions or disruptions in service at one of our hub airports, our increasing dependence on technology in our operations, labor issues, restructurings by competitors, the effects of terrorist attacks and competitive conditions in the airline industry.

Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in Delta's Securities and Exchange Commission filings, including its Form 10-Q, filed with the Commission on September 7, 2005. Caution should be taken not to place undue reliance on Delta's forward-looking statements, which represent Delta's views only as of September 7, 2005, and which Delta has no current intention to update.


Source: Delta Air Lines
 

chperplt

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4 million? You could at least make it believable

I think that was the point.... Just like the 15 day agreement... to be a joke... HA HA
 

jws717

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you actualy took the time to type all that, loser....
 

General Lee

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A lot
A lot of the senior RJDC guys can't wait to get back into the Cessna 210s they started in back in '82--(just before they upgraded to the Bandit).



Bye Bye--General Lee
 

Taco Rocket

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IHaveAPension said:
Give it time, they will eventually be sold to Mesa.


That's what we're hearing too... being told to get together a merger fund.

Mesa Taco Rocket
 

PBRstreetgang

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IHaveAPension said:
Give it time, they will eventually be sold to Mesa.
Hey,
Just think, DAL sold to mesa at firesale prices, and General tool swinging some booger-eating, 250hr san juan wonder's gear.
Priceless
PBR
 

mamba20

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God, we heard this crap for how long with ASA? Give it a rest! Does anyone remember when this board was cool? NOW IT SUCKS!!!
 

414Flyer

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Thats pretty good. I did a similar one on April 1, regarding a Boeing and Airbus merger, but the mods deleted it pretty quickly. No sense of humor I tell ya.
 

Dodge

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After reading the last quarterly report for DAL today, I believe that 4 mil might buy Delta.
 

BODENE

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Comair may be off block for now

By James Pilcher
Enquirer staff writer

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In recent years, when Delta Air Lines would shrink its operations either at the Cincinnati/Northern Kentucky International Airport or other locations, its regional subsidiary Comair either would not be affected or would grow by picking up the slack.

But not this time.

When Delta Wednesday cut 26 percent of its total capacity out of the Cincinnati hub, the Erlanger-based airline was not spared. It will lose nearly 100 flights from its local operation – and potentially up to 350 jobs total.

In a memo to workers, Comair president and chief executive officer Fred Buttrell said the cuts would come from areas ranging from pilots to flight attendants to customer service and support staff.

“While it’s always regrettable when changes impact our company and our people, these are difficult and necessary,” Buttrell wrote in the memo, which also said the airline was implementing a hiring freeze. “These decisions are never easy. As the schedule is finalized over the next few weeks, we will make every effort to minimize the employee impact through a number of measures, including attrition, relocation and leaves of absence.”

Comair employs about 7,000 system-wide, including about 4,000 locally. That total number is up from just over 5,500 two years ago.

With more than 400 flights, the airline that began as a small father-and-son operation in 1977 also operates the most departures locally. But those departures are going from 401 to 314 on Dec. 1.

The moves probably put off any immediate sale of Comair, one expert said.

Rumors have swirled about a potential sale for nearly a year and flared up once again last month when Delta sold sister regional subsidiary Atlantic Southeast Airlines to Utah-based SkyWest for $450 million. Delta bought Comair for $2.3 billion in January 2000.

“It doesn’t mean that Comair will never be sold, it just mean it won’t happen right now,” said HelaneCQ Becker, airline analyst with New York-based The Benchmark Group. “They just have too much going on to be sold.”

According to information filed by Comair with the U.S. Department of Transportation, Comair turned a $4.9 million operating profit on operating revenue of $310.6 million in the first quarter of 2005. But the airline had the second-highest costs per passenger among major regional carriers nationally.

Comair officials would not discuss those financial figures but said the operational cuts could lead to even higher costs per operation. That’s because the moves decrease the amount of time Comair’s planes can spend in the air by nearly an hour per day on average.

“When you apply that across our entire fleet, essentially that puts pressure on our costs,” spokesman Nick Miller said.

He said that includes labor costs. Earlier this year, Comair won concessions from its 1,900-member pilot union, which agreed to a pay freeze. In addition, the 1,000-member flight attendant union agreed to a lower pay scale for new hires.

But those are tied to growth targets for both increased jobs and number of planes.

“We’ll have to address that, and we’ll have to be very up front about the seriousness of the challenges we face,” said Miller. “We have to continually look at every area of the company to achieve those cost savings. We are continuing to have discussions with representatives from our labor groups on these issues.”

But J.C. Lawson III, chairman of the Comair pilot union, said he has not been officially approached about more concessions. He also said the agreement included a no-furlough clause. In addition, the amended contract calls for the reinstatement of scheduled raises if the growth figures are not met.

“But I would say that the mood (at the company is) not somber,” said Lawson, whose union is a local branch of the Air Line Pilots Association. “You would’ve had to have been in a hole someplace not to know that there are problems. We’re going to have to figure out how to deal with them. So the mood is not upbeat, but certainly it’s not like this is the end. It could have been way worse.”

Representatives with the flight attendant union – a branch of the International Brotherhood of Teamsters – did not return calls seeking comment.
 

BenderGonzales

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Yup, decrease block hours and guess what happens to your average cost per seat-mile.

If Fred wants to reduce costs there are two ways to do it. Fly more block hours and carry more passengers (you can start by retrofitting all of those "40s" into "50s").

If he comes to you for concessions, tell him to get bent.
 

mamba20

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Stiflers mom: "You mean the one about Skywest buying ASA?"

Yes, true. I was getting at how much talk there was about it for months before it actually happened.
 
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