Should Delta Spin Off Comair and ASA?

[Snoopy58]

General Lee, please check your PM's

Thanks!

 

[General Lee]

Anon,

I am sorry if I sounded rude, I am getting tired of the whipsaw just like everyone else. I just hope some of the DCI carriers don't bid for the 100 seat flying WHILE we still have furloughs. As soon as they are back, I hope Delta hires a lot of you guys.


Snoopy,

Those numbers you gave are very close, but we have very few 777s--so not many guys ever see that money. We have had and will have a lot more retirements due to rising Gatt rate, so more people will pass through the 777 on the way out. I know it sounds like a lot---but it is a limited number.... Take care.


Bye Bye--General Lee

 

[sleepy]

ASA and Comair are great assets for DAL. We were both worth a lot of money when we were purchased. I DAL needs to sell us off to raise cash, then they will nedd to find somebody who has the cash (around $2 billion) to buy us. Who whould that be? I doubt there would be much interest in a ASA or Comair IPO. Who would want to but two airlines tied to a soon to be bankrupt airline that has never made any money?

The bankruptcy will likely involve the selling-off of many DAL assets. It will also involve the furloughs of at least 1000 more mainline pilots, maybe more. having seen how the J4J things all worked out at USAir and their WO's, I would rather be an independent company than a DAL WO when that happens.

An independent ASA or Comair could obtain larger aircraft (kiss the part of your DAL CBA that restricts that good-bye in Ch 11), fly for other code share partners, or eve go it alone a la ACA.

Be careful what you wish for Heavy Set. Without the ability to control ASA and Comair in our upcoming DAL bankruptcy, there will be no place for a J4J program to work. Where will your furloughed pilots go?

 

[On Your Six]

Sleepy,

Are you a financial analyst too? COEX was a smash hit when it sold to the public a year or so ago. Continetal was in dire straits at the time. If Comair and ASA are so profitable, then potential shareholders would be nuts NOT to invest in it, right? You guys claim Comair and ASA are doing so well - that's great. I am sure that strong financial performance will be appealing to the investment bankers who set up the public offerings...

As far as J4J, perhaps regionals who COMPETE for DAL contracts in the future will have to employ any DAL furloughees - kinda like UAL and USAirways... Then everyone wins - you guys get autonomy and the ability to grow your fleets more, Delta gets the cash it needs and the furloughees finally get back in the cockpit....

 

[FlyComAirJets]

Yep, let's split up Delta entirely "so perhaps regionals who COMPETE for DAL contracts in the future will have to employ any DAL furloughees." Song could COMPETE with Express (kind of like JetBlue versus Southwest) and Shuttle could COMPETE with DCI (like mainline American versus Eagle).

Oh wait, it's been done, they called it Celebrity Death Match.

 

[FlyComAirJets]

Express Jet IPO'd at about 15 bucks per share a couple years ago. It promptly went down to a low in the 7 to 8 dollar range. Today it quotes at less than 13 1/2 dollars a share.

"Smash hit"? Hee hee hee.

----------------------------
Financial analyst, me? No, but I did sleep in a Holiday Inn Express last night.

 

[vc10]

Just to clarify, spinning off an entity does not necessarily mean selling it to another company. Spinning off to the public means selling shares in the entity to the public. Continental spun off COEX to the public (sold shares to the public) but kept a slice of the equity for itself.

You don't need corporate buyers to spin off a division or subsidiary...

Actually, you can spinoff without _anyone_ buying what's being spun off. You can dividend the new company shares to existing shareholders.

So, for instance, Delta could give every Delta shareholder shares in Comair (for instance, for every 10 shares of Delta stock, a Delta shareholder might get a share of Comair) which they would then be free to trade as they pleased.

If all Comair shares were dividended that way, then once the spinoff was accomplished, Comair would be a freestanding company independent of Delta. Initially, Comair shareholders would be the same as Delta shareholders, but that would quickly change as some people traded one while keeping the other.

In this way, Comair could be spun off of Delta without another company buying it and without and IPO.

 

[JI Gone OH]

General,

You said "I am sorry if I sounded rude, I am getting tired of the whipsaw just like everyone else. I just hope some of the DCI carriers don't bid for the 100 seat flying WHILE we still have furloughs. As soon as they are back, I hope Delta hires a lot of you guys. "

Is it fair to say you meant that you hope that Delta hires a lot of DCI guys, excluding Comair, right?

 

[General Lee]

I don't know what the interviewers will do eventually. I am sure though that any of the furloughs will have access to them, and they may add their thoughts to the matter. Who knows????

Bye Bye---General Lee

 

[JI Gone OH]

General...

My last reply to you was not meant to be disrespectful, it's just that your comments in the past with respect to filling future Delta pilot slots with anyone BUT Comair Pilots doesn't make everyone feel all bubbly... It just adds fuel to a fire that should have been put out long ago. Those kinds of statements make you guilty of the "whipsawing" you claim that you are so tired of.

Everyone within Delta/DCI should be tired of the "whipsaw," but management continues to win by all of us wasting time and energy bickering amongst ourselves. The only way to make progess is if everyone works together, and that includes working with all DCI carriers, including Comair. We make up a large part of the DCI network, and its time to put the issue of Comair not hiring Delta's furloughs behind us and look ahead. I, for the record, was in support of bringing the furloughs on board ( I was furloughed from JI back in 2001, I know what it's like to be unemployed). Our leadership decided otherwise, they had their reasons, and whether you or I agreed with them is now irrelevant and it's time we look ahead. If you still harbor bad feelings towards this Pilot group or any other within the DCI network, let it go and we'll be able to accomplish a lot more.

I have enjoyed your input to this forum over the past few years. Hope that you had a nice holiday.

 

[sleepy]

Actually, you can spinoff without _anyone_ buying what's being spun off. You can dividend the new company shares to existing shareholders.

So, for instance, Delta could give every Delta shareholder shares in Comair (for instance, for every 10 shares of Delta stock, a Delta shareholder might get a share of Comair) which they would then be free to trade as they pleased.

If all Comair shares were dividended that way, then once the spinoff was accomplished, Comair would be a freestanding company independent of Delta. Initially, Comair shareholders would be the same as Delta shareholders, but that would quickly change as some people traded one while keeping the other.

In this way, Comair could be spun off of Delta without another company buying it and without and IPO.

I thought Heavy Set was suggesting that DAL sell ASA and Comair to raise cash? How does giving shares of ASA and Comair to DAL shareholders do that?

 

[vc10]

I thought Heavy Set was suggesting that DAL sell ASA and Comair to raise cash? How does giving shares of ASA and Comair to DAL shareholders do that?

Clearly dividending Comair shares (or ASA shares) to Delta shareholders does nothing to raise cash.

But there are other reasons to spin off one or the other. For instance, if Delta wants to lay to rest, forever, the idea of merging ASA and Comair, all it needs to do is spin one off. If its bankers tell it that an IPO would be unpopular, then dividending stock would be one way to go.

Buttrell has said that they'll sell one before they allow the pilots to force a merger. An ASA/Comair merger will just never happen.

 

[sleepy]

Never say never! United and TWA will never go bankrupt, right. Eastern won't go bankrupt? Right?

Phil will never win a major golf tournament, right?

Before it is all over, ASA and Comair might be the major (LCC), and DAL might be just flying international only.

Bring on the spin-off of ASA and Comair, it can't get any worse for us, only for the mainline guys.

Go to AJC.Com an read all of the comments about DAL pilots in the Editorial Section this Sunday. Nobody in Atlanta cares what happens to DAL pilots. Other DAL employees hate DAL pilots. No sympathy, period!

 

[Sam Fisher]

Once again....we see that pilots should run airlines. Clearly, airline management teams aren't seeing where they are screwing up. They should run these companies solely for pilots because the corporations are in fact, "pilot welfare outfits." I mean, why shouldn't they put a bigger airplane on a route when in fact, they might see a greater yield with a smaller plane? They should make this loser move simply to appease and protect the larger airplane pilot. Makes sense, right?

Some of you might view this post as harsh, but it is so funny to watch how brilliant some of these posters think they are when it comes to the world of airline economics. The sheer amount of inaccurate information on this thread alone is staggering to me. Those of you advocating the spin-off of CMR/ASA should do some more homework so you can truly understand how/why CAL spun off XJT and what the effects were to both entities. There is more than meets the eye. Many of the posters advocating this transaction are doing so from a position of selfishness and naivete.

Perhaps you guys should let the airline executives run the airline and you guys should stick to flying the airplanes. If you think you can do a better job, go get an MBA and apply for their jobs. What looks obvious to you is probably not the case in actuality. There is always "the big picture" and it isn't always "black and white." I know it is easy to slam the CEO's and that will always occur, but some of the absolute ridiculousness I see spewed on this thread is entertaining.

Some will flame me for this post, and that is fine, but it is really funny to see how many armchair airline CEO's we have on here.

Sam

 

[Pez D. Spencer]

It's easy to feel bullied by mainline pilots, on this board, at work when you deal with scope limitatons affecting your career, and when considering the future of your airlines... but, the views in those editorials, while real, are just part of the game that is being played. Are Delta pilots being villified... yeah. But, I don't think it my place to decide how much a cut they should take. I expect that they would give me the same consideration.

Corner an angry animal, and you're gonna get bitten.

Unfortunately, the opinions of mainline pilots expressed here reveal an attitude of, not only indifference, but continued hard feelings -- not only participating, but encouraging whipsaw tactics.

But, they are being villified by their company. I don't know if I blame them for fighting back. They're human.