What do we know about Compass?

[DoinTime]

You're living in a fantasy world if you really think NW has any real interest in selling CPS to RAH. NW wants to IPO CPS in the future, but merger mania may derail those plans.

In addition, according to your logic, NW has an interest in selling MES to 9E. Not going to happen either.

My speculation is based on DAL buying NWA. In this case NWA won't be selling anything because NWA will not exist. What you need to ask yourself is what will DAL do with the assets?

I think its a safe bet to assume that DAL won't have much interest in maintaining the NW pilots lifeboat airline. Richard Anderson is already on record saying that the number of DCI carriers will be cut in half over the next few years.

 

[CRJ_Driver]

My speculation is based on DAL buying NWA. In this case NWA won't be selling anything because NWA will not exist. What you need to ask yourself is what will DAL do with the assets?

I think its a safe bet to assume that DAL won't have much interest in maintaining the NW pilots lifeboat airline. Richard Anderson is already on record saying that the number of DCI carriers will be cut in half over the next few years.

While it may be viewed as a negative to wholly own your regional airlines, it can also be viewed as a positive. By eliminating paying an lift provider a guaranteed profit margin, an airline effectively earns 7-8% profit overnight plus any value they can create for the wholly owned in terms of spinning it off. That said, there is significant investment which probably makes for a poor ROI, but perhaps a great IRR down the road.

I don't know, I see the former DAL mgmt as being anti wholly owned after the Comair strike, but I don't view NWA mgmt as having that view and imho, Richard Anderson is NWA thru and thru.

I don't think CPS was ever viewed as a NWA pilot lifeboat by NW mgmt and that is why there is value here. But, if you don't take that view, then yeah, I agree with you when you say, why keep CPS around?!

 

[DrewBlows]

My speculation is based on DAL buying NWA. In this case NWA won't be selling anything because NWA will not exist. What you need to ask yourself is what will DAL do with the assets?

I think its a safe bet to assume that DAL won't have much interest in maintaining the NW pilots lifeboat airline. Richard Anderson is already on record saying that the number of DCI carriers will be cut in half over the next few years.

If Delta buys NWA they may very well not have an interest in keeping Compass. It doesn't really matter what their interests are though, because the collective bargaining language stays intact until it's negotiated away, which means NWA (or Delta) can't sell Compass until they negotiate a deal with the pilots to do so. The pilots may very well negotiate a sale of Compass, but I guarantee it won't be cheep.