Jon Rivoli said:
"We have no idea what Delta is thinking regarding Comair, although if it looks like there's a deal that fits with our corporate objectives we would be open-minded," SkyWest CFO Bradford Rich said.
The idea that SKYW has "no idea what Delta is thinking re Comair" is a completely ludicrous statement; in other words a lie. The rest of the statement is true -- if there's a deal that fits the objectives of SKYW, Rich will take it. Only a fool would not.
That is contingent on Delta's ability to exit bankruptcy or at least to have the
potential of doing so. In turn, Delta's survival is contingent on an agreement with its pilots. Should they walk out, Delta will cease to exist.
If Delta ceases to exist, Comair will cease to exist on the same day -- it is a wholly owned subsidiary. What's left will be a collection of unwanted airframes (and longer lines at the unemployment office). Parked airframes have little value to anyone (that's why the desert remains full of them) and corporations couldn't care less about unemployed workers.
ASA, the SKYW subsidiary, will be left with "nothing to do", i.e, gilted at the altar - out of business. So will approximately 1/2 of Skywest (that feeds Delta).
In that case, Rich will be scrambling to survive -- not worrying about how to buy anything.
We can't get to your "question" until and unless the Delta debacle is resolved. Assuming that it is resolved favorably, your question can be answered.
I restate my question.
What do they have that we might want?
160 + jets that fly for Delta. The "benefit" to Skywest isn't "Comair" per se, it is the
control of Delta feed that would accrue to SKYW and the revenue potential that control would guarantee.
Should SKYW acquire CMR, it would "control" approximately 3/4 of all Delta's "regional" feed. You can pretty much bet that Rich would secure that percentage for SKYW before he signs anything (just as he did with ASA). Skywest would then have the leverage to actually negotiate with Delta, rather than be dictated to by Delta as is now the case. Such an acquisition would give Skywest (and Rich) a major power increase and a substantial cash flow/revenue increase.
Power = money and
money is the
only factor that "fits" the corporate objectives to which Mr. Rich refers.
The company that Rich runs is in business to make money. How that money is made is irrelevant as long as the flow keeps coming and gets bigger over time. [Airplanes, people, etc., are just tools than can be used to generate money.]
The opportunity to make more money is the "thing" that Comair has that Rich might want. That's what generates "interest" and it is also what makes "deals" gel.
Delta's desperate "struggle" is an opportunity for Rich. Should the cards line up, he will play the hand.
Should Delta collapse, its current desperate struggle will become Skywest's desperate struggle. There is no rocket science involved.
That should answer your question.
