Comair confident of staying connected to Delta
By Lisa Cornwell Associated Press Writer / May 29, 2008
CINCINNATI—While
Delta Air Lines Inc. and
Northwest Airlines Corp. forge ahead with plans to combine, Delta subsidiary Comair is moving forward with confidence that it will remain an integral part of Delta's network of regional fliers.
Comair said it is making steady progress in cutting $35 million in costs this year as part of Delta's overall cost-cutting in response to high fuel prices, and the company recently announced it won't have to cut back as much as expected on aircraft and flights. The Erlanger, Ky.-based airline also is adding income by providing contract work in ground handling and maintenance for other airlines.
Delta President Ed Bastian said last month that no decision had been made on whether to keep Comair as a subsidiary. Regardless, he said Comair will remain an important part of the Delta Connection network.
Delta recently decided to end a contract with another Delta Connection carrier -- Freedom Airlines, a subsidiary of
Mesa Air Group Inc. Mesa is trying to block that action in court, saying the regional contract amounts to about $20 million in monthly revenue.
Aviation industry analysts say Comair's chances of continuing as a Delta Connection carrier look better than those of some others.
"Comair is a high-cost operation, but they deliver for Delta, and that's what is keeping them at the front," said analyst Mike Boyd, of The Boyd Group based in Evergreen, Colo. "Comair isn't perfect, but most other small jet providers can't match them in terms of dependability."
Comair's cost-cutting also should help, said Richard Golaszewski, executive vice president of the aviation consulting firm GRA Inc. in suburban Philadelphia.
"Generally, the low-cost provider wins," Golaszewski said.
Comair received some good news this month. The airline said in January it would remove up to 14 aircraft from its fleet and cut 10 percent to 15 percent of its total scheduled flight hours this year under Delta's overall cost-cutting plan. Comair now says it will return seven 50-seat aircraft to service in June and add up to 10 percent more flight hours than initially planned. Instead of shrinking from 131 jets in January to 121 jets by June, Comair will have 128 aircraft.
"In an economic environment that is certainly difficult, any measure of growth is good news," Comair spokesman Kate Marx said. "This demonstrates the critical role Comair plays for Delta."
Comair flights are split between its Cincinnati hub and the Northeast, which includes airports in New York City, Washington and Boston. Comair connects passengers with several international flights at those airports and also in Atlanta.
Delta spokeswoman Susan Elliott said Comair's importance as a connector to international flights contributed to its flights not being trimmed as much as initially planned at a time when record high fuel costs are forcing cutbacks across the industry.
Boyd thinks the decision to cancel the contract with Freedom Airlines also helped Comair.
Many large airlines have spun off their regional carriers, and Golaszewski said Comair could continue on its own.
"It's always good to have the financial backing of a larger company, but it will be the contract with Delta -- whatever that might be -- that will be the key to keeping the business," he said.
Comair also is pushing ahead with efforts to provide ground handling services for other airlines. A major contract with United Express, which operates feeder flights for United Airlines, is creating 185 jobs.
The work for United Express began in December at Louisville International Airport, and 11 additional markets will be added by June 30, Marx said.
Comair currently handles flights by seven other airline brands in 20 locations, and now the number of flights handled will more than double.
Ground handling services include checking passengers in for flights, helping them board aircraft and handling baggage and cargo. Maintenance work for other carriers is growing on a smaller scale, Marx said.
"Comair has not allowed itself to be distracted by the 'what ifs,'" said Marx.
"We are moving forward with the confidence that the right balance of cost and quality will yield positive results."
While Comair has reason for confidence at this point, Boyd said, nothing is assured.
"Unfortunately, being a well-run, customer-oriented airline is no guarantee of success, especially if oil prices continue to rise," he said.
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