SkyWest buying Comair?

Captain_Bob

Captain_Bob

Well-Known Member
Forbes.com Delta hinting at Comair sale...

Delta Air Lines revealed on Tuesday that it might seek to unload more assets, a move that is sure to resurrect speculation about a sale of its regional carrier Comair.

In a filing with the Securities and Exchange Commission, Chief Financial Officer Ed Bastian said that the company will "seek continued opportunities to unlock shareholder value," including "further monetization of assets."

The company didn't announce specifically what it might sell, but in August 2005, the company agreed to sell its subsidiary Atlantic Southeast Airlines to SkyWest (nasdaq: SKYW - news - people ) for $425 million. Also in 2005, it sold some of its wide-body jets.
One sale possibility is Comair, a wholly owned subsidiary of Delta based in Cincinnati. The company has not said exactly what it plans for Comair, and rumors have long swirled that it might unload the carrier to improve its liquidity.

"We will, once we're out of bankruptcy, look at whether owning that business makes a lot of sense," Bastian said at an investor conference Tuesday.

Bastian also said Delta (other-otc: DALRQ - news - people ) hopes to return to profitability this year, predicting a pre-tax income of $816 million. Basitan explained in the filing that improving RASM, or revenue per available seat mile, has been crucial in the company's brightening prospects.

RASM is a key measurement used by airlines. Delta's RASM has traditionally lagged behind its competitors.

In 2005, Delta's adjusted passenger RASM was 8.6 cents, or 86% of the industry average of 9.9 cents. By last year, it had improved to 10.2 cents, or 93% of the industry average of 11.0 cents. Delta said it expects its RASM to grow a further 4% in 2007, compared to 1.5% for the industry.

Delta also stated strategic plans for 2007 on Tuesday. Chief Operating Officer Jim Whitehurst said the company aims to improve market share in New York, expand internationally, continue to improve its RASM and earn customer preference.

Delta also said in the filing, which is a presentation for the Tuesday conference, that it now plans to emerge from Chapter 11 on April 30 and relist its stock in early May. The company had said in earlier filings that it planned for a May exit from Chapter 11.

Delta was delisted from the New York Stock Exchange in 2005 after the company fell below the exchange's minimum share price standard. The company filed for bankruptcy soon after. (See: "Grinstein's Delta Bankrupt.")
The Associated Press contributed to this article.
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The sale of Comair has been one of the worst kept secrets on earth!

To whom, who knows. It really doesn't make a lot of sense, from an accountant's aspect, to keep your own outsourced feed in-house when you can throw it onto the open market and let the lift providers claw it out to get the lowest RFP bids.
 
Doug Taylor said:
The sale of Comair has been one of the worst kept secrets on earth!

To whom, who knows. It really doesn't make a lot of sense, from an accountant's aspect, to keep your own outsourced feed in-house when you can throw it onto the open market and let the lift providers claw it out to get the lowest RFP bids.
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Delta should have kept their feed in house and stapled Comair and ASA to the bottom of their seniority list.

Comair and ASA make billions of dollars for Delta annually and they want to sale? For what $500 million cash to make their sheet look more liquid???

I'm no MBA, but to me it make more sense business wise to have two proven billion dollar money makers ( read: sure bets) on your profolio than liquid cash.
 
Let's see, Delta gives the remainder of the -900s to Comair and then sells them off. Exactly what happened with NWA and Pinnacle correct? Heck, SkyWest wouldn't be the only one looking at purchasing them. Mesa, XJT, Republic, etc...
 
GaTechKid said:
Let's see, Delta gives the remainder of the -900s to Comair and then sells them off. Exactly what happened with NWA and Pinnacle correct? Heck, SkyWest wouldn't be the only one looking at purchasing them. Mesa, XJT, Republic, etc...
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I don't think that Delta will "give" the planes to anybody. They own "your" 900's as it is. SKYW leases them.

Besides from Delta's persective it is better to have a regional by the neck and kick them in the balls at the same time than, just have them in a choke hold.

Read: Not only can we farm out our flying to the lowest bidder, but ack rite or we will move our planes around!
 
For some reason I just dont see this. No inside information but it just would seem like SKW has to work out the ASA thing and make sure it is going to run smooth before investing a lot more money else where. Right now they are still profitable and I'm just unsure if they would want to invest in another "high risk" company that could quite possibly take them down. Who knows, stay turned and see though.
 
meyers9163 said:
For some reason I just dont see this. No inside information but it just would seem like SKW has to work out the ASA thing and make sure it is going to run smooth before investing a lot more money else where. Right now they are still profitable and I'm just unsure if they would want to invest in another "high risk" company that could quite possibly take them down. Who knows, stay turned and see though.
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Another high risk company? Their whole industry is high risk!!!
 
You know what. Part of me wishes SKW would just get it over and done with. Buy CMR. Alright, so now CMR and ASA under the SKW umbrella of "dirty-red headed step child."

Rock on. . .I wonder where I should go work now.
 
I'll betchya a dollar that the purchasing entity is going to be Republic.
 
Comair is gonna be sold. I'd put a fair bit of green on that bet.

Latest rumot is an IPO/spinoff into a stand alone company. IMHO that would be the best option as far as Comair and the regional industry goes.
 
Well, it won't be Pinnacle. We blew our funds on Colgan and Q400s......

On the other hand, Skywest is already short staffed. Buying Comair, who is bleeding pilots and will probably have tons of guys jump ship if Skywest buys them, would only compound the staffing issue.
 
kellwolf said:
Well, it won't be Pinnacle. We blew our funds on Colgan and Q400s......

On the other hand, Skywest is already short staffed. Buying Comair, who is bleeding pilots and will probably have tons of guys jump ship if Skywest buys them, would only compound the staffing issue.
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Well - might just teach money hungry and market share hungry regional companies (SKW, Mesa) a valuable lesson.
 
surreal1221 said:
Well - might just teach money hungry and market share hungry regional companies (SKW, Mesa) a valuable lesson.
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The market share lesson was already taught years ago via United and NWA. The problem is the regional industry is insulated from the risk via the service agreements with the big boys. Regional CEOs don't really have many decisions to make, they just have to keep their mainline customers happy. They don't have to worry about where they're going to start new service, how to market the product or setting fares. In fact, I wonder why we even HAVE a marketing department!
 
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