It has begun

[darling pretty]

So now they are starting to shed their WO's. What happens to the CAL guys who have displaced CALEX pilots ? Are we now talking about pilots who work for an entirely different company then leapfrogging back into CAL ??

What a mess.


Northwest, Continental File Regional IPOs
Mon Feb 25, 7:31 PM ET

WASHINGTON (Reuters) - Northwest Airlines Corp. and Continental Airlines on Monday filed for initial public offerings on their regional carriers as major airlines seek to strengthen operations after the Sept. 11 attacks.


Northwest Airlines, the No. 4 carrier, said that it had filed to offer as much as $400 million in stock in an initial public offering of its regional carrier.

The St. Paul, Minneapolis-based carrier said all the shares in its renamed regional unit Pinnacle Airlines would be offered by its indirect subsidiary NWA Inc.

But the airline did not provide details such as the size and price of the proposed IPO in a preliminary prospectus filed with the U.S. Securities and Exchange Commission (news - web sites). Northwest said NWA will hold 13 percent of Pinnacle's outstanding common stock.

Northwest's filing followed an announcement by Continental Airlines that it would offer more shares in a public offering for its regional carrier ExpressJet Holdings.

Continental, the No. 5 U.S. carrier, said ExpressJet and Continental will both sell 10 million shares at a range of $14 to $16 each, yielding a market value of about $896 million to $1.02 billion when the IPO is completed.

Houston-based Continental delayed its offering after last year's attacks on the United States that dampened air travel demand and forced most major U.S. airlines to restructure their fleets.

Deutsche Banc Alex Brown airline analyst Susan Donofrio said last week that major U.S. airlines may look to shed their wholly regional carriers this year to shore up balance sheets hurt by the travel downturn.

Continental Airlines, AMR Corp. and Delta Air Lines are the most likely candidates to spin off regional carriers in the near term, Donofrio wrote in a research report.

At the close of trading on Monday, Continental Airlines shares finished up 28 cents at $31.18 while Northwest shares were up 45 cents, or 2.94 percent, at $15.75 on the Nasdaq.

 

[gOOfly]

Still more...

Looks like another one feels there will be more. Read the last paragraph. Aviation Now.com

 

[surplus1]

It makes perfect business sense for CAL to sell some shares in CALEX. It will raise quite a bit of money and it won't change much of anything in what either company does.

They really aren't "separating" the companies, they have always been separate. Continental isn't going to lose control of COEX because of this.

It would be logical too for Delta to go public with DCI. They could raise a couple billion in cash and continue to do exactly what they are doing now.

The only real danger is if the "spin offs" are no longer controlled by the spinner. If that is allowed to happen the big boys might well have to buy them back.

Why do you think Delta bought Comair in the first place? They had to control it and could not afford to have it go it's own way by being truly independent. Comair wouldn't sign the kind of contracts that ACA and SkyWest did so Delta was forced to buy. If the IPO is structured correctly, they can get their money back and maintain control. That's exactly what CAL is doing.

 

[Saluki Dawg]

You're wrong Surplus1.
CAL is FULLY divesting themselves of CALEX. They will retain NO control of the new company, to be named ExpressJet Holdings, INC. CAL pilots that flowed back to CALEX, will still have full recall rights to return to CAL whenever a recall finally takes place. Even after we are fully divested, the CAL pilots will be allowed to remain on our seniority list until their recall date. It is a real mess over here right now.

 

[surplus1]

I understand your dilema. The issues around your seniority list, the CAL pilots, your FTA and your SSL desires are all separate from the corporate transactions.

CAL may very well sell all of the Express Jet common stock and then the "spin off" will be complete. Nevertheless, they will find a way to continue to exercise "control" over Espress Jet. It may take the form of contracts with CAL, ownershipe by CAL of the aircraft or leases, and a variety of other ways.

The point I'm trying to make is this. CAL is not going to allow its "feed" and small jet program to go up in smoke and dissapear just because of this IPO. Neither is it going to allow anything that happens at Express Jet to destroy the core business of CAL. "Control" will be exercised one way or another.

As an example, neither United or Delta own SKYW, but if you don't believe they control what SKYW does, you'd better guess again. The same thing applies between NWA and Mesaba, and between UAL and ACA. The contracts (code share agreements) between the parties are structured in such a way that the big airline has control over the small airline. The same thing will happen at the new Express Jet.

On the separate issue of your seniority and your union: Back when you guys were jumping up and down about getting on the ALPA bandwagon, I tried to warn you about the outcome of your SSL movement and your combined MEC. You laughed. Right now all of it has come true. Just wait until you are "separate" from CAL completely. Then you will find out just how much of ALPA's leverage will be used in your behalf and how much will be used against you. When you enter your 3rd year of "negotiations" without a new contract, can't get a "release" and after CAL's new Scope is in place, give me buzz and let me know what you think then.

I'm sorry this is happening to you guys. You deserve better and I am really on your side. However, I am not at all surprised by the turn of events. I wish you the very best.

 

[flydog]

Saluki

If you read the prospectus for the IPO you will find that it is non voting stock. CAL will retain voting stock which esentially gives it indirect control of the company. This is standard in most IPOs these days where the founders and management do not want to cede control to shareholders