market watch SKW

[bayoubandit]

[font=MS Sans Serif,verdana,arial,helv][size=-1] SkyWest stirs Delta Air regional talk
By MarketWatch
Last Update: 6:11 PM ET March 8, 2005

SAN FRANCISCO (MarketWatch) -- SkyWest Inc. shares bucked the broader selling in the airline sector Tuesday one day after a top executive said that the carrier has held talks with Delta Air Lines about a possible deal for the latter's regional operations.

SkyWest Chief Financial Officer Bradford Rich (SKYW: news, chart, profile) , said Monday at an investor conference that Delta (DAL: news, chart, profile) had talked with SkyWest about a transaction for Comair and Atlantic Southeast Airlines.

With about 8,100 workers and 217 aircraft, SkyWest already operates Delta Connection flights, as well as regional flights for United Airlines (UALAQ: news, chart, profile) and Continental Airlines (CAL: news, chart, profile) .

"We have had some discussion with Delta about this. They have expressed their desire pretty specifically to us," Rich said at the Raymond James Institutional Investors Conference in Orlando, Fla., according to a Webcast available Tuesday. "Anything we do in this area, we will be very careful." Rich's comments were originally reported on the Wall Street Journal's Web site.

Rich added that Delta, which spent $2.9 billion buying Atlantic Southeast and Comair, is looking to "generate some capital somewhere and this is one way to do it," according to the Webcast.

SkyWest spokesman Michael Kraupp on Tuesday made clear that such talks represented just one venue for the company's more than $500 million in cash. Other options include share buybacks or special dividends. It's an area investors have a lot of questions about, Kraupp said, and that's what Rich was addressing at the conference.

"He [Rich] was trying to point out the strength of our balance sheets," said Kraupp.

Analysts watching the sector said that such a deal would come under close shareholder scrutiny.

"This does little to help Delta, other than providing liquidity," wrote Prudential Equity Group analyst Bob McAdoo in a Tuesday research note. "Such a purchase by SKYW would likely not be viewed as a positive by SKYW shareholders as these commitments would be taken on to support DAL, a carrier that may still have to file for bankruptcy before it is fixed."

Delta Air said it would not comment on the matter.

St. George, Utah-based SkyWest rose 13 cents to $18.02, while the broader Amex Airline Index (XX:$XAL: news, chart, profile) fell 1.5 percent to 49.25. Delta Air Lines stock gave up 18 cents to $5.09. See full story.[/size][/font]http://www.marketwatch.com/news/story.asp?siteid=mktw&guid=%7BF33F8D1C%2D4734%2D40FC%2D91CD%2D8B2B262C51C8%7D&

 

[General Lee]

"This does little to help Delta, other than providing liquidity," wrote Prudential Equity Group analyst Bob McAdoo in a Tuesday research note. "Such a purchase by SKYW would likely not be viewed as a positive by SKYW shareholders as these commitments would be taken on to support DAL, a carrier that may still have to file for bankruptcy before it is fixed."



Thanks Bob McAdoo for stating the obvious. Delta would like to have some cash. I am glad that you and Ray Neidl disagree. Cash will help pay off these higher fuel prices, and fuel surcharges have just started ($20 per roundtrip) and more could be added and will probably stick if oil goes to $60 a barrel. And debt relief would also happen is some form, which would help.

But, I do have one big question------is Lowecur's real name Bob McAdoo? Come on Bobby! Fess up!


Bye Bye--General Lee

 

[bayoubandit]

SKW CEO also denied the acquisition on company website.

 

[cl65capt]

But, I do have one big question------is Lowecur's real name Bob McAdoo? Come on Bobby! Fess up!


Bye Bye--General Lee

I thought Bob McAdoo was retired from the NBA?