Experts predict Comair may be sold

[General Lee]

skiddrivr,

It also makes sense to atleast two major aviation analysts. You can re-read the article if you want. NW didn't wait to get Pinnacle's new pay rates down, they IPO'd it when they needed the cash. Look at CoEX---they are in the middle of talks now, and they IPO'd it two years ago(?). Maybe they will wait awhile until you are about to go back to talks and then IPO it......I don't know.

Bye Bye---General Lee

 

[skiddriver]

General,

We don't go into talks for a couple of years. Delta can sell us with our contract intact, go into bankruptcy without selling us and try and get our contract opened in court, or "buy" paycuts from us by giving us something in exchange - then either sell us or not. I never said that Delta wouldn't sell us, what I said is that YOU haven't thought through what it is that Delta might have to offer the marketplace to make the sale, or offer us to get us to open our contract early. If we leave the fold with our contract intact, before bankruptcy, our piece of the recovery concessions goes with us. Any money that could be gained from the sale will only fund Delta's burn rate for a couple of months at the most. The idea that our sale will lessen deep paycuts from your pilot group is wishful thinking on YOUR part, as is the assumption that we will give up any portion of our contract without some reciprocal incentive from Delta management. They don't have a crowbar big enough to pry our contract open...yet.

Now that the spinoff thing is out of the bag, it is in our interest not to give up anything. Reducing our pay would just boost money going into Delta's pocket from the sale. If we have to give up pay, it makes much more sense (from our viewpoint) to do so when it makes our new separate company healthier and more competitive. That's AFTER we're sold, not before. Delta is going to have to offer us a lot to unlock the contract now.

 

[FlyComAirJets]

Interesting article, it's kinda funny how those who belittle airline "experts" suddenly champion those whose views support their own agendas.

Let's see, getting a "few hundred million dollars each" for a $2.5 billion initial investment and $670 million lost during the strike for a strike that was costed out at $175 million in pilot demands, and desperately needed aircraft wilting in the desert. Yep, there is no limit to the monumentally stupid business decisions Delta has made.

Perhaps Delta might be on its way to becoming a virtual company. All services will be performed by outside companies under more or less direct control ala Delta Ground Services insead of Delta mainline for ground handling. Their largely non union employee groups could be easily split into competing groups, each vigorously competing for work. They do it now in CVG with aircraft cleaning, instead of mainline doing aircraft cleaning, at one point they had four outside companies doing it locked in cut-throat competition.

But there is no reason to expect they would stop short with the pilot groups with this type of business model. Comair and ASA IPOs? Sure it's possible, so is Song and Shuttle and every other flight division at Delta. I think we can compete with them and the rest of the DCI carriers just fine, the question is, (and I think Skids has touched on it) why would Delta pilots want that?

One last point, IPO contractural stipulations would become subject to some sort of renegotiation in the face of Chapter 11. As an independant company, a spun off company such as ASA or Comair would be subject to alter the recently imposed terms. You can't have it both ways.

Interesting times.

 

[FurloughedAgain]

StaySeated

The amount of cash in the bank is NOT indicative of how close a company is to bankruptcy.

To be honest the company determines its own personal minimums in that regard since the more liquidity you go INTO bankruptcy with, the more likely you are to successfully emerge.

I would venture a guess that around 1 billion Delta's accountants will start recommending chapter 11 in order to restructure debt.

If Comair and ASA are spun off and/or sold prior to such a filing they will be excluded from the restructuring. The company would, however, most likely try to ammend the codeshare agreements (along with agreements with Chautauqua, ASA, Skywest etc...) through the bankruptcy process.

In doing so Delta would take the chance that the "new" Comair might terminate the codeshare agreement altogether, or rewrite the agreement (in exchange for a more lucrative fee-per-departure agreement for Delta) allowing them to pursue codeshare opportunities with other carriers.

Bankruptcy is a slippery slope. I have no doubt that the paperwork is signed and sitting in a locked drawer in Grinstein's desk with the lawyers on speed-dial to run it over to the courthouse some Friday afternoon. The filing's impact on Comair and the career expectations of Comair's pilots is entirely dependant upon Comair's relationship with Delta when it occurs.

Personally i'd much rather be an independant entity, free to negotiate normally with management, than a wholly-owned suddenly FORCED to negotiate by a judge with no knowledge of the airline industry.

When the pilot group was asked to take concessions it was in order to "buy growth". They did the right thing declining that request. You dont buy growth. If the economics of growth exist than the company will grow regardless.

If the pilot group is faced with concessions in order to SAVE the airline, save jobs, prevent the loss of flying -- I personally hope and believe that they will engage the company to prevent the loss of jobs.

I wont "buy" new jobs at this company. But i'll fight like hell to keep the ones we have. From the most junior to the most senior, each job on this property is every bit as valuable as every other job. If we do spin off and go it on our own, i'm willing to work with management to make it a success and to keep all 1800+ of us working. Thats my choice.

If we're still wholly-owned after a bankruptcy filing we simply wont have a choice. We will be solely dependant upon the will of a judge who will likely compare our agreement to Mesa's.

FurloughedAgain(?)

 

[sleeve]

IMHO it hasn't happened yet, wall street analysts know absolutely nothing when it comes to speculation. Nobody at Delta has even mentioned a selloff.This is just a goofball analyst making a statement about what he thinks will happen.He must be the almighty Mesia.

Anybody have the number to R. Branson's office. I may want a piece of that new US Virgin airline when it comes around. I will SPECULATE that they will have some good looking FA's.

 

[Publishers]

posts

Back when Pinnacle and Express were being put together, I mentioned that the possibility of spinning off a regional was one main reason that a major would never merge talks with their regionals. This is an example of why you have the regional set up in the first place.

In the other two examples, they have contracts for a speicified period and then you are on your own. That does not mean that they would not be attractive, depending on the price. They havea quality fleet and route structure.

With or without a BK consideration, the potential cash influx may be worth it.

 

[Lear70]

NW didn't wait to get Pinnacle's new pay rates down, they IPO'd it when they needed the cash. Look at CoEX---they are in the middle of talks now, and they IPO'd it two years ago(?). Maybe they will wait awhile until you are about to go back to talks and then IPO it......I don't know.

Bye Bye---General Lee

General,

I agree with you on most of your posts, but I must disagree with this one. I don't have a dog in the Delta / Comair battle, but even so I highly doubt their pilots will vote in any kind of concessions after the lengths they went through to get a decent wage (finally) at a crappy level of this industry.

Your post above makes it seem as though you expect CoEx and PCL to take pay CUTS this time around in negotiations when quite the opposite is true. If you listen to CoEx's union hotlines, the Company has already offered the CoEx pilots close to Comair rates, and the Association turned it down because of other problems in that offer.

Pinnacle is starting negotiations next month and I can guaran-fu*kin-tee you that we're not going to take pay cuts, nor are we going to sign for anything NEAR what Mesaba negotiated for our same seat jet rates which are, by the way, less over the term of their contract than our CURRENT rates if adjusted by 2.5% per year which our current contract does. Are we worried about giving that flying to Mesaba? Not really. We have 89 aircraft right now and our IPO makes it illegal to reduce us to less than 79 aircraft and we could give a d*mn about more growth as long as we have decent pay rates and QOL. Most of us are actually shooting for Comair rates and it would take a bankruptcy filing by NW mainline to change our minds.

The Comair guys might actually be better off if DAL files and they were already spun off because their contract wouldn't be up for discussion and they'd remain profitable - DAL needs the feed. As long as a regional airline is profitable, even if by a thin margin, there is absolutely NO reason to even DISCUSS a pay cut, not here, not CoEx, and certainly not Comair either. Let them find more money from more routes, better aircraft utilization, and new contracts...

Good luck to all of you, I'm back to scouring the jobs to help my dad find a new one after his 23 years at USAirways... Fu*king Bast*rd Siegel needs to be kneecapped for taking his money and running at the first opportunity.

 

[sleepy]

What will Comair have to lose if DAL spins them off? TravelNet at home, DAL flight pass, DAL scope, Limits of aircraft type. I would take the possibilities of getting more and larger aircraft and the ability to fly for other partners over the few little bennies we get from being a WO.

I only hope that ASA can gain it's freedom from DAL before the whole ship sinks into Ch 11.

 

[FlyComAirJets]

An ASA/CMR spinoff gives DAL four to six months more cash to burn through, then what? It is like amputating because of a cut, it still doesn't stop the bleeding, though.

Big words, Lear70. You talk the talk, let's see if the Pinnacle pilots will walk the walk. Best of luck.

 

[Lear70]

Thanks for the good wishes Fly... After being on reserve for three years I'm disgruntled enough to walk NOW. H*ll, I NEED a vacation; can't we just save all the time and effort and strike now?

Kidding of course; the company wanted to start early, wouldn't it be great if they had bigger plans in mind and are willing to give a little more to get a contract quickly? Come on, we can all dream...