Delta is in talks with SkyWest to sell one or both of its regional airlines.

[Smiliner]

Here is the headline...

"Delta is in talks with contract carrier SkyWest to sell one or both of its regional airline subsidiaries, according to a SkyWest executive. "

Anyone have an sign-on to the Wall Street Journal online? I can't access the whole article.

 

[snow-back]

Delta in Talks to Sell Subsidiaries
[font=times new roman,times,serif][font=times new roman,times,serif]By EVAN PEREZ
[font=times new roman,times,serif]Staff Reporter of THE WALL STREET JOURNAL[/font]
March 7, 2005 11:09 p.m.[/font]

[/font] Delta Air Lines is in talks with contract carrier SkyWest Inc. to sell one or both of its regional airline subsidiaries, according to a SkyWest executive.

The third-largest U.S. airline in terms of traffic is still struggling to overcome huge financial losses as it pursues a turnaround strategy that includes a simplified fare structure, cost-cuts and efforts to improve customer service. After reporting a $2.2 billion loss in the fourth-quarter the airline startled investors by revealing it was planning to tap the last of a $1.1 billion cash infusion it received last fall, raising the prospect that, with fuel costs still high, it may have significant cash needs later this year.

Bradford Rich, chief financial officer of SkyWest said Monday at an investors conference said Delta had expressed "more than just an interest" to sell the two subsidiaries, Comair and Atlantic Southeast. SkyWest, based in St. George, Utah, operates regional feeder jets for Delta, mostly out of the carrier's Salt Lake City hub.

"We think we're in the best position of anyone to take advantage of this type of opportunity," Mr. Rich said at the Raymond James Institutional Investors Conference in Orlando, Fla. He didn't specify whether SkyWest was interested in one or both of the carriers and he noted that the discussions were in the early stages. But he said SkyWest's initial view is that it can cut about 5% of the costs of either carrier.

A Delta spokesman didn't return a call seeking comment. A SkyWest spokeswoman said she didn't have additional information to provide.

Delta spent $2.9 billion acquiring ASA and Comair about five years ago, back when the company was swimming in dot-com era profits. While producing badly-needed revenue, and some profitability, the two companies have been problematic for Delta, including a 2001 pilots strike at Comair, and operational and customer-service problems at ASA. Last quarter, the company recorded a $1.9 billion charge related to the estimated fair value of ASA and Comair.

 

[MJG]

Very interesting.....

Consolidation of the regionals, the next big thing ???

 

[blzr]

the two companies have been problematic for Delta

I don't get it?

 

[Smiliner]

What I don't get is this. What happens to the seniority list when a non-union airline purchases a union one?

No flame bait, I just have no idea what would happen.

Also, why couldn't ASA and Comair do what ExpressJet when they were sold off from CO?

 

[trip]

This is nothing new, SKYW had this offer on the table from Delta for some time now. Maybe they are taking another look.

 

[twobits]

maybee skywest will pick up the frj's as well...if skywest picks up ASA and Comair then they can do what ALPA at ASA and Comair have been pushing for over the last few years, have one airline. Although, it would be interesting to see how they would merge the airlines with non-union and union.

 

[DoinTime]

If I hear that Skywest is going to buy another carrier again i think I'm going to puke!

 

[SouthTex]

Ahhhhhhh........this is delicious, ASA moves in on a Delta/United carrier and the United carrier feels pressured. Contracts, In-House unions, Brasilias, EMB-170's, Parent company in bankruptcy.....

 

[Tina Fey's Scar]

Oh it's easy... you get a stapler and attach the Comair list to the bottom of the Skywest list. ASA goes below that.....

BOHICA SUCKERS!!!

 

[SouthTex]

Just what a carrier in contract negotiations and a carrier who took a pay freeze will allow, a non-union carrier to decide their fate.

 

[General Lee]

OOOOOOOOOOOOOOOOOOOOhhhhhh SNAP! And SkyWest isn't an ALPA carrier..... What is the merger policy of a non-ALPA carrier? Looks like the Brasilia FOs could be CR7 captains really quick..... Oh Snap!


Bye Bye--General Lee

__________________
"Ride the Snake"

---Jimmy Tango's quick weight loss
Plan

(Jim Carey on SNL)

 

[Truckdriver]

Each time SKYW has bought an airline the employees of the acquired airline have
really gotten the short end of the stick. If SKYW does buy ASA or CA I would be very surprised to see the ASA or CA guys get treated fairly. The only hope they have is that ALPA may be able to broker some sort of Allegheny/Mohawk merger deal. Once on property, they could maybe get ALPA on property and things wouldn't be so bad for them. That is probably the best case scenario. The worst case scenario is Jerry A. getting his wish to just buy the assets and then hire the employees that he needs. That would most likely be in reverse seniority order like it was when they bought WestAir.

It would be better if XJT was to buy ASA and CA. Then there would be one huge A$$ ALPA regional carrier that might just have a little leverage to shake things up a bit in the regional industry. I've heard around town that DAL execs have also had a few working dinners with the XJT guys about this same issue. It makes sense to have more than one company in on the bidding to see who will give them the most cash. The only reason you don't hear about XJT in on the deal is that their execs can keep their mouths shut and the SKYW guys are always running their mouths about stuff they shouldn't.

 

[General Lee]

Ahhhhhhh........this is delicious, ASA moves in on a Delta/United carrier and the United carrier feels pressured. Contracts, In-House unions, Brasilias, EMB-170's, Parent company in bankruptcy.....

Parent company in bankruptcy? A sale will get us through the end of this year, and avert that. Thanks SkyWest! And, while you are at it, please allow the whole bunch of pilots to fly those new sparkling E170s at Brasilia wages...... You have to, or UNITED will DROP YOU......IF you don't, the whole Cathay Pacific codeshare WILL NOT HAPPEN.........


Bye Bye--GENERAL LEE......

 

[SouthTex]

If a sale of Comair, ASA, or any other Delta Connection carrier is going to save you through the rest of the year, then we must be worth more than was initially expected. You seem to be coming around, 76 pilots for 73 wages!

 

[General Lee]

If a sale of Comair, ASA, or any other Delta Connection carrier is going to save you through the rest of the year, then we must be worth more than was initially expected. You seem to be coming around, 76 pilots for 73 wages!

Well, I knew the end of this year was going to be tight, and they have been saying some profits are possible at the beginning of next year. That would mean we would have to get through the rest of this one, and those high gas prices don't help much. But, a little cash infusion could help! Thanks SkyWest dudes!


Bye Bye--General Lee

 

[SouthTex]

So what happens after the sale to compensate for fuel, when you have a check in hand?

 

[chperplt]

General,

You're getting so excited.. at your age that's dangerous.

The more likely senario.... Comair buys Delta. Your company is valued at what these days? It wouldn't take much..

Ladies and Gentlemen.. Welcome aboard Delta flight 1724, your Comair Connection to Cincinnati.

 

[SouthTex]

Isn't it 5724?

 

[DesertFalcon]

Delta in Talks to Sell Subsidiaries
[font=times new roman,times,serif][font=times new roman,times,serif][/font][/font]
Delta spent $2.9 billion acquiring ASA and Comair about five years ago, back when the company was swimming in dot-com era profits. While producing badly-needed revenue, and some profitability, the two companies have been problematic for Delta, including a 2001 pilots strike at Comair, and operational and customer-service problems at ASA. Last quarter, the company recorded a $1.9 billion charge related to the estimated fair value of ASA and Comair.

SkyWest buying these airlines sounds like a really good way to sink a perfectly good regional airline. They don't pay well, but SkyWest has good management and knows how to make money. I hope they don't fall for the "Bigger is Better" idea.