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Delta Air Lines Reaches Definitive Agreement to Sell ASA to SkyWest

iaflyer

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Delta Air Lines Reaches Definitive Agreement to Sell Atlantic Southeast Airlines to SkyWest

Customers to Experience Seamless Transition with No Expected Significant Changes in ASA Flight Schedules, Locations Served
Agreement Strengthens Delta's Strategic Relationship with SkyWest
Transaction Improves Delta's Liquidity ATLANTA, Aug. 15 /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 Atlantic Southeast Airlines, Inc. (ASA) to SkyWest, Inc. (Nasdaq: SKYW - News) for a purchase price of $425 million in cash. ASA will continue to serve Delta customers under a new 15- year Delta Connection agreement, with ASA's fleet of more than 150 aircraft continuing to fly Delta routes.

Delta Chief Executive Officer Gerald Grinstein said, "We are pleased to strengthen our long-time relationship with Delta Connection partner SkyWest 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 ASA for operational excellence and cost improvement. Delta has extensive experience working with SkyWest and other regional carriers under capacity purchase arrangements.

Full details here...
 

lowecur

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the continued commitment to the RJ

DL needs the cash in BK, and this is the only reason they are doing this deal. I don't see too many investors that will be happy to pump money to exit BK, unless Comair goes away and is replaced by the Republic Groups E-jets or a scope change where the DL pilots agree to fly them at the going rate.
 

lostplnetairman

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Flying Tiger said:
Anyone remember what DL paid for ASA? How about Comair?

They purchased ASA Holdings for $700 million in 1999. Prior to that they owned 28% of the stock (I don't know what they paid for that). At the time they estimated the cost to exceed the value of the assets by $519 million.

In November, 1999, Delta purchased the remaining 78% of Comair stock it didn't already own for $1.8 billion (I don't know what it paid for the first block of stock). At the time they estimated the cost to exceed the fair market value of the assets by $1.4 billion.

HR Diva
 
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180ToTheMarker

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incentives to reward ASA for operational excellence and cost improvement.

I wonder how many of those incentives ASA will get...
 
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