Delta to sell ASA to Skywest for $425 million
Aug 15, 2005, 3:39 pm
#1
FlyerTalk Evangelist
Original Poster
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Delta to sell ASA to Skywest for $425 million
Here's some breathing room for DL:
http://biz.yahoo.com/cbsmb/050815/65...d401.html?.v=1
Should help DL's cash position as it readies itself for its Ch 11 filing.
Delta Air to sell regional unit for $425 million cash
Monday August 15, 5:31 pm ET
By August Cole
SAN FRANCISCO (MarketWatch) -- Delta Air Lines said late Monday that it is selling its Atlantic Southeast Airlines for $425 million in cash to SkyWest Inc. in a bid to raise capital and shore up its liquidity position to fend off bankruptcy. Part of the sale proceeds will be used to pay down $100 million in debt, including some from GE Commercial Finance . The ASA operations will still fly for Delta Connection, the airline said.
Monday August 15, 5:31 pm ET
By August Cole
SAN FRANCISCO (MarketWatch) -- Delta Air Lines said late Monday that it is selling its Atlantic Southeast Airlines for $425 million in cash to SkyWest Inc. in a bid to raise capital and shore up its liquidity position to fend off bankruptcy. Part of the sale proceeds will be used to pay down $100 million in debt, including some from GE Commercial Finance . The ASA operations will still fly for Delta Connection, the airline said.
Should help DL's cash position as it readies itself for its Ch 11 filing.
Aug 15, 2005, 3:41 pm
#2
Join Date: Oct 2004
Posts: 1,973
And DAL follows with an after-hours gain of 45%... 
Aug 15, 2005, 3:41 pm
#3
FlyerTalk Evangelist
Original Poster
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Here's another story with much more detail:
http://biz.yahoo.com/ap/050815/delta.html?.v=5
Maybe this will work for DL; I have loaded up on DL just in case it works.
http://biz.yahoo.com/ap/050815/delta.html?.v=5
Maybe this will work for DL; I have loaded up on DL just in case it works.
Aug 15, 2005, 3:47 pm
#4
Join Date: Apr 2003
Location: Orlando
Programs: DL 4MM/PM, UA 1MM/Gold, AA Paper
Posts: 1,386
Maybe Skywest can do something DL could not - improve ASA customer service, although I have my doubts.
Aug 15, 2005, 3:53 pm
#5
Join Date: Oct 2000
Location: Munich, Germany
Programs: LH HON, DL FO/MM, Marriott Lifetime Platinum, Accor Lifetime Platinum, Sixt Diamond
Posts: 6,174
You have a hard time to fix something that's been broken for a long time.
Aug 15, 2005, 4:22 pm
#6
Join Date: Mar 2004
Location: Orem, UT, USA
Programs: DL PM, HHonors Diamond, Hyatt Platinum, Marriott Gold, SPG Gold
Posts: 413
When they originally purchased it, what did Delta pay for ASA?
Aug 15, 2005, 4:49 pm
#7
Join Date: Dec 2000
Location: MA
Programs: DL DM/2MM Marriott Platinum, HH Diamond,
Posts: 8,906
It will be interesting to speculate as to the eventual effect on DL's bottom line. Obviously, DL owned ASA completely. On the other hand, SkyWest is paid a fee per departure by DL for its DL Connection flights. We can assume that the ASA flights will operate under the same fee per departure scheme. So how does this ultimately impact DL going forward?
Aug 15, 2005, 4:57 pm
#8
FlyerTalk Evangelist
Original Poster
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Originally Posted by RobertS975
So how does this ultimately impact DL going forward?
Aug 15, 2005, 5:03 pm
#9
Join Date: May 2004
Posts: 519
Originally Posted by sorro
When they originally purchased it, what did Delta pay for ASA?
In November, 1999, Delta purchased the remaining 78% of Comair stock it didn't already own for $1.8 billion (I don't know what it paid for the first block of stock). At the time they estimated the cost to exceed the fair market value of the assets by $1.4 billion.
Also, they announced that they got an extension on their M/C and VISA credit arrangements to 10/31. The processor wants a big chunk of change to renew--perhaps from this sale?
Aug 15, 2005, 5:05 pm
#10
Join Date: Nov 2002
Location: Chicago, IL USA
Posts: 862
What is in it for Skywest?
It looks like Delta could declare Chapter 11, walk away from the agreements with ASA and Skywest, and still pocket $350 million, leaving Skywest with a fleet of orphan RJs.
On the other hand, $100 million is $100 million, and Skywest may be seeing that as sufficient leverage to help maintain their lucrative contracts with Delta, especially if (when) DL goes Ch. 11.
On the other hand, $100 million is $100 million, and Skywest may be seeing that as sufficient leverage to help maintain their lucrative contracts with Delta, especially if (when) DL goes Ch. 11.
Aug 15, 2005, 6:38 pm
#11
FlyerTalk Evangelist
Join Date: Sep 2002
Location: IND
Programs: DL PM & 2MM™, Lifetime HHonors Diamond
Posts: 20,889
Originally Posted by RobertS975
It will be interesting to speculate as to the eventual effect on DL's bottom line. Obviously, DL owned ASA completely. On the other hand, SkyWest is paid a fee per departure by DL for its DL Connection flights. We can assume that the ASA flights will operate under the same fee per departure scheme. So how does this ultimately impact DL going forward?
Aug 15, 2005, 6:40 pm
#12
FlyerTalk Evangelist
Join Date: Sep 2002
Location: IND
Programs: DL PM & 2MM™, Lifetime HHonors Diamond
Posts: 20,889
Overall, I think this is a good move for everyone. I was really betting that it was Comair that would be sold. I figured that is the only one of the two that were sellable. Delta doesn't have the time, money, or energy to fix ASA. I would look for SkyWest do to some serious housecleaning at ASA. Of course, they can't fix it overnight but you can bet they will try some changes quickly. Now, we understand the much larger ASA presence at SLC.
Aug 15, 2005, 6:45 pm
#13
Join Date: Nov 2000
Location: Utah, USA
Programs: GM, Marriott Silver, Hertz Gold
Posts: 179
Originally Posted by indufan
Overall, I think this is a good move for everyone. I was really betting that it was Comair that would be sold. I figured that is the only one of the two that were sellable. Delta doesn't have the time, money, or energy to fix ASA. I would look for SkyWest do to some serious housecleaning at ASA. Of course, they can't fix it overnight but you can bet they will try some changes quickly. Now, we understand the much larger ASA presence at SLC.
Grinstein is 70+ yrs old and has said his remaining life's goal is to save this airline. He's sure making a good try at it and getting no help at all from luck (oil).
Aug 15, 2005, 6:58 pm
#14
FlyerTalk Evangelist
Join Date: Sep 2002
Location: IND
Programs: DL PM & 2MM™, Lifetime HHonors Diamond
Posts: 20,889
Originally Posted by Owen
Grinstein is 70+ yrs old and has said his remaining life's goal is to save this airline. He's sure making a good try at it and getting no help at all from luck (oil).
And I assume that all of you are seeing your highest gas prices yet right now.
Aug 15, 2005, 8:43 pm
#15
Join Date: Jan 2005
Location: Panama City Beach, FL (ECP)
Programs: Delta PM, Alaska MVP, Hilton GoldMarriott Titanium
Posts: 780
Im guessing that ASA will still be operating as ASA after becomming a part of SkyWest? Also does anyone think this will have an impact on the ASA route structure/schedule?
