bvt1151 said:
Sorry, but this is a misconception. What you are calling "common carrier" is actually "single carrier" .... a ruling that would come from the NMB (National Mediation Board). This type of ruling deals only with union representation. It has nothing whatever to do with corporate mergers or single seniority lists. ASA and Comair are already represented by the same labor union, i.e., ALPA. Therefore a "single carrier petition" is irrelevant and would accomplish nothing.
There is no legal way for the MEC's or the ALPA to force Delta to merge ASA and Comair.
It is nothing more than an ill advised pipe dream that we should not be wasting any energy to pursue. If Delta management wishes to merge those paper corporations (ASA/CMR) it will do so and it will cost the pilots nothing. Obviously they do not want to do that or they would have already done it. Tryin to "buy" a merger, especially one that would produce zero tangible benefits for the pilot groups, is a bad idea. Even if ASA/CMR pilots all agreed to fly for free, I doubt you could convince Delta, and if you did convince them on that basis you would gain absolutely nothing other than a very doubtful increase in leverage at the bargaining table. Leverage you would then be required to use trying to get back to where you are now.
Delta would no longer be able to play you against each other (ASA/CMR) but they haven't done much of that anyway. They would still have the same ability to whipsaw you with Delta mainline, SkyWest, Chautauqua and who ever replaces ACA or comes out of the woodwork later on.
I admit I haven't been able to figure out what iyour MEC's think they would gain from this CMR/ASA merger. I guess that's why they're smart enough to be on the MEC and I'm not. I sure wish they'd focus on something beneficial instead of something politically correct.
Delta does not have to sell one of them to prevent a merger. If you really think that it's another misconception. All that Delta has to do is ignore the merger proposals, nothing more. In case you haven't noticed, that is exactly what they have done.
With respect to the spin off of Comair or ASA, I see a lot of comparison with the spin off of COEX (XJT) by CAL. The idea is similar but the scenario is not.
At the time that CAL spun COEX, the latter was the sole provider of CAL feed. The subsequent "contract" between CAL and XJT (a part of the IPO) could reasonably be expected to provide a relatively stable source of revenue for XJT, thus encouraging investors to participate in the IPO. It did generate substantial "cash" for CAL.
If Delta were to "spin off" either CMR or ASA or both, it would not be the same. The "new" (we'll say it's CMR for the purpose of illustration) company would not have an "exclusive" contract with Delta, such as XJT has with CAL. Instead, it would be competing for Delta business with no less than 3 other "regional" airlines that also have contracts with Delta (ASA, SKYW and CHQ). This would significantly reduce the value of the IPO to any investors.
It is not very logical to expect (as an investor) growth and earnings from a company engaged in a bidding war with three other companies and whose sole source of revenue comes from a contract with a financially unstable corporation (Delta).
Of course there is always a "sucker with money" who will buy anything that is offered. Institutional investors often do that, since they are not investing their own money.
The CAL spin off may have been financially beneficial to CAL, but it certainly has not been a good investment for the people that put money on the line. The IPO opened at $16, is currently trading at $13.5 and hasn't made a nickel for any investor from day one.
I realize there is always a fool willing to part with his money and a crook willing to take it, but I'd be hard pressed to see the desirability of buying stock in a spun-off Comair as a good opportunity.
All the reasons why this proposed sale is a "good idea" for Delta have been listed (and then some) in this and the other related threads floating around. The folks doing the writing would like to see it happen (to further their own parochial interests) and promote every alleged advantage to Delta that they can think of, while carefully avoiding any mention of the disadvantages to the potential investor.
Delta paid a lot of money (1.8 billions) to buy Comair four years ago and shortly thereafter took another 700 million dollar hit from a strike. While Comair may be profitable (I know Delta pilots don't think it is), it is unlikely that Delta has had time to recoup its investment. Comair once had a value that could be measured, but Delta has long since removed the yardstick. What new stock in a Comair might be worth is a best a bad guess. Maybe they would just like to "write it off" and get rid of Comair, we'll have to wait and see.
I happen to be one of the people that wishes that Delta had never purchased Comair to begin with, so I'm not against the idea of a separate Comair per se. However, the Comair that Delta bought four years ago does not exist today and would not be restored by an IPO. The business climate is likewise quite different. A "spin off" of Comair is not likely to create a truly independent company, but rather one fettered to Delta by a contract that would preclude any logical opportunities for Comair. Comair woud still be the same puppet that it is now with perhaps a different puppeteer. Additionally, Comair's senior mangement (that put it on the map) is gone. Comair is today saddled with doing a whole lot of things that it would never have done in that way but for the takeover by Delta.
The advocates (who seem mostly to be Delta pilots) had said that a spin off would allow Comair to seek contracts with other majors. That's interersting. I wonder what majors those might be? A bankrupt UAL, a failing USAirways, American with its own Eagle, NWA with Mesaba and PCL, CAL with XJT and others. The truth is there are no "other majors" with whom to contract, they are all married already. I suppose Comair could underbid Mesa and try to steal a contract. Why not? Everyone does that to Comair and I'm sure it would please the Delta pilots to see us working for less.
Delta pilots see Comair's "growth" as phenomenal because that's how Delta pilots think. Yes, more airplanes are being operated with the name Comair than before, but Comair hasn't grown, Delta has grown. They just don't call it Delta and the Delta pilots are unhappy because they aren't in CMR cockpits. The truth is if the RJs were being operated by "the mainline" and flown by Delta pilots, they would not be saying the things they are.
Now, if we could find a way to get Delta to truly "sell" Comair, that might not be a bad idea. An independent Comair could find a lot of things to do, but none of those things is likely to be pleasing to Delta. Comair was purchased to prevent it from being independent. If it is sold, it won't be done in a way that would allow it to be independent again.
Comair was once very attractive to investors and a successful Company. Delta killed it very effectively. An IPO in the style of CAL/XJT will not revive or return the Comair that once was, it will just create one more mundane, going nowhere, operation that may be of interest to pilots, but should not be of interest to any sensible investor.
If you'd really like to know how exciting it is to invest in a "regional airline" just go back a few years and look at the charts. I think you'll find that the only one that's made any money of any of them are the day traders. Speculators, not investors. Lot's of people go to Las Vegas, so I suppose you could find an equal number willing to invest in a Comair IPO. After all, NWA got somebody to buy Pinnacle.
