Is the sale of ASA imminent?

[Medeco]

Read the last part of this and if you believe that this guys speakes every word of this very carefully, then you could say that the sale of Comair is not imminent ,but ASA could be a done deal for all practical purposes. If this quote is exactly what he said, then it sounds pretty prepared and specific to me.

Medeco




Delta Ch. 11 decision likely within months
CEO says board will 'wrestle' issue
By James Pilcher
Enquirer staff writer

[url="http://cmsimg.cincinnati.com/apps/pbcsi.dll/bilde?Site=AB&Date=20050608&Category=BIZ01&ArtNo=506080314&Ref=AR&MaxW=300&MaxH=700&border=0"]http://cmsimg.cincinnati.com/apps/pbcsi.dll/bilde?Site=AB&Date=20050608&Category=BIZ01&ArtNo=506080314&Ref=AR&MaxW=300&MaxH=700&border=0[/url]http://news.cincinnati.com/graphics/spacers/spacer_1x1.gif[url="http://news.cincinnati.com/graphics/buttons/zoomtab.gif"]http://news.cincinnati.com/graphics/buttons/zoomtab.gif[/url]The Associated Press / Balce Ceneta
Delta Airlines CEO Gerald Grinstein, front, Northwest Airlines president and CEO Douglas Steenland, center, and United Airlines chairman, president and CEO Glenn Tilton, testify Tuesday.
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[url="http://ad.doubleclick.net/ad/N1057.Integrent/B1614555.4;abr=!ie4;abr=!ie5;sz=300x250;ord=2005.06.08.18.09.58?"]http://ad.doubleclick.net/ad/N1057.Integrent/B1614555.4;abr=!ie4;abr=!ie5;sz=300x250;ord=2005.06.08.18.09.58?[/url]RELATED STORIES• Delta says pension change would help avert default




Delta Air Lines' board of directors could start considering whether to take the company into bankruptcy within about four months, the beleaguered carrier's top executive said Tuesday.

"Toward the end of the summer or early fall is when they'll start to wrestle with the question of where we are and what our prospects are," Delta chief executive officer Gerald Grinstein said in an interview from Washington, D.C. It was the first time Grinstein had said when the process toward a possible filing could begin.

Grinstein said Delta's directors have given no indication they would change the current strategy of staying out of Chapter 11 at all costs. But Grinstein, who serves on the board, vowed to ask for as much time as possible before a filing, saying the company needed until early next year to finish management's recovery plan.

"I look at it this way," he said. "Vince Lombardi always said that he never lost a football game. It's just that time ran out on him."

Delta, which operates its second-largest hub locally, avoided a filing late last fall when it got concessions from its pilots and new loans. Last month the airline said if fuel prices continued at their current levels, bankruptcy could be a possibility - but it did not give a time frame for a filing.

Grinstein testified Tuesday morning to the Senate Finance Committee about pension reform, which he said is a key to Delta staving off Chapter 11.

In the interview, he did not alter his stance on the often-mentioned possible sale of Erlanger-based regional subsidiary Comair.

"It is an asset and a very valuable part of our network, but one can also get the same benefit without owning it," Grinstein said, adding selling Comair is not "imminent".

 

[FL000]

That wasn't a precise quote by Grinstein. The way newspapers work is that they often "clean up" the quote to make it fit their story, but without changing the meaning.

He may very well have said, "They are assets and very valuable parts of our network, but one can also get the same benefit without owning them," and, "The sale of Comair and ASA is not imminent."

However, since the story is by The Cincinnati Enquirer and is focused solely on Comair, they are free to ethically reword the quote to suit their needs. It happens all the time.

I'm not saying you're wrong, just that this isn't the smoking gun.

 

[bafanguy]

I have personally been at two functions where GG spoke on this issue. He's very cagey about making a direct statement in response to a direct question re Ca or ASA, but in both cases made reference to Skywest as an example of how DL could get the same benefit from an airline ( feed, etc.) without the complication of actual ownership.

He then said something akin to read my body language...and then just smiled. I've personally seen him do this twice and don't need some hack newspaper reporter ( who can't report yesterday's weather and get it right) to tell me what GG is trying to say. Although one can never know for sure, I'm betting both CA and ASA are actively on the market...you got the money, you got yourself an airline.

By the way, can you make your posts a bit narrower ?

 

[~~~^~~~]

Delta may declare bankruptcy and screw employees out of pensions, but they somehow find the cash to promote Gay Pride events including sponsoring speeches by the author of "Secrets of a Gay Porn Star" as well as youth initiatives that allow gays to question kids about their sexual preferences.

Delta deserves what it gets with decisions like these.

 

[CRJ puppy]

You don't get it, do you?

 

[rjcap]

One question.



Who would by either ASA or Comair ??

I don't think the issue is whether or not they are for sale but who in the marketplace would want to buy either of these entities who soley exist to provide service for mainline. Considering that Delta is on the verge of chapter 11 why would you buy ASA or Comair ??

Just curious.

 

[General Lee]

Who would buy ASA or Comair? SkyWest will, because if they do not, they will be left behind and Mesa will come in and take over SLC. JO decided not to invest in USAir, which means he has extra cash, and now he has extra planes available from USAir Express (about 60 RJs) that could be used to replace all of SkyWest's feed if they are not "interested" in helping us out.



Fins,

You continue to say that our employees will be $crewed out of our pensions, when in reality they are already gone. The people that could be screwed are the already retired. I have no belief that I will have a conventional pension like a DB plan, I think I will have a 401K and leave eventually with what has acrued. My own pension will consist of me selling the real estate I have bought over the last few years, which has gone up considerably. They just aren't building extra land anymore!



And, here is an article from our CFO:


Bankruptcy not planned, but can't be ruled out-CFO
Wed Jun 8, 2005 05:44 PM ET
NEW YORK, June 8 (Reuters) - Delta Air Lines (DAL.N: Quote, Profile, Research) Chief Financial Officer on Wednesday said filing for bankruptcy was not part of the cash-strapped carrier's transformation plan, but it is a possibility he cannot entirely rule out.


Speaking at the Merrill Lynch Transportation Conference in New York, Michael Palumbo said the Atlanta-based carrier would like to complete its transformation plan outside bankruptcy court. The plan targets more than $5 billion in annual savings by 2006.

"Our plan is designed and best executed outside the statutory process," Palumbo told analysts. "But I could not stand here in front of you and say ... we cannot fiducially consider the alternative."

Delta in May said it won't generate enough cash to meet its liquidity needs this year, raising new alarms the airline could have to file for bankruptcy in the next few months.

But General Electric Co.'s (GE.N: Quote, Profile, Research) finance arm last week agreed to relax certain requirements under a credit agreement, a move seen as allowing the carrier to stave off a bankruptcy filing this year.

Delta avoided a brush with bankruptcy last year when it lined up $1.1 billion in financing from General Electric and American Express Co. It also announced a few months ago it would cut 7,000 jobs, or 12 percent of its workforce, and reduce pilots' pay by a third.

Palumbo said Delta's transformation plan is "on track," but the airline still faces several challenges. "Quarter over quarter, fuel price increased by 49 percent, domestic yield fell by about 9 percent," he said. "Yields continue to be under pressure," he added, referring to low airfares stemming from tough competition in the airline industry.

"The current estimate for fuel prices remain significantly higher than those we had planned for the rest of 2005," Palumbo said. "And increased interest costs as a result of our overall debt has also become a burden for us."

Delta, which has roughly $13.9 billion in debt, posted a 2004 net loss of $5.2 billion. It is one of several U.S. carriers that have faced cash crunches in the past two years. Two of its largest rivals, United Airlines (UALAQ.OB: Quote, Profile, Research) and US Airways (UAIRQ.OB: Quote, Profile, Research) are operating under Chapter 11 protection. "The challenges certainly remain," Palumbo said. "And we continue to evaluate opportunities to further reduce cost and manage spending."


Bye Bye--General Lee

 

[rtmcfi]

Who would buy ASA or Comair? SkyWest will, because if they do not, they will be left behind and Mesa will come in and take over SLC. JO decided not to invest in USAir, which means he has extra cash, and now he has extra planes available from USAir Express (about 60 RJs) that could be used to replace all of SkyWest's feed if they are not "interested" in helping us out.

Hey General-
Didn't Mesa already put 30 rj's with Delta, and 30 rjs with United? Where are they going to find the other 60 RJs to replace SkyWest?

 

[General Lee]

Good question. But, with ASA getting more 50 and 70 seaters and Skip Barnett saying that some 50 seaters will be in SLC by the end of this summer, I would say that those 30 Mesa birds plus some ASA birds could probably replace SlyWest at SLC. Those 30 Mesa birds are supposed to replace the old ACA Dornier routes, but they have been dormant for six months at least. Those 30 Mesa planes could easily go to SLC if needed. Why would SkyWest be suddenly interested again in ASA? I bet there is some pressure from somebody high up....


Bye Bye--General Lee

 

[MedFlyer]

General,

You'd better hope that SkyWest doesn't buy ASA. Because if they do, they will control a tremendous amount of DL's feed. When it comes time to negotiate new fee for departure rates, SkyWest is going to *ss rape Delta. Hope you enjoy watching your concessions go to subsidize SkyWest, so that they can buy more RJ's for United, your competitor.

Keep in mind that if DL cancels the contract with SkyWest, DL will be obligated to take on most of SkyWest's RJ's and all associated debt (just like the ACA FRJ deal).

At this point, SkyWest is in the drivers seat. DL is just a bum on the street begging for some change.