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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
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.
ADVERTISEMENT
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
