Pinnacle Considered buying Comair

ERLANGER – Delta Air Lines announced the sale of two of its regional subsidiaries Thursday, and company officials acknowledged that local regional carrier Comair was part of the initial negotiations.

Delta spokeswoman Kristin Baur said that Memphis-based Pinnacle Airlines, which is buying Mesaba Airlines from Delta, considered buying Erlanger-based Comair.

“However, no offers were made by these interested parties to purchase Comair,” Baur said. “We continue to explore alternatives, but we can’t comment further on the potential sale of individual assets.”

Mesaba, Compass and Memphis-based Pinnacle had served as regional feeders for Northwest Airlines, which merged with Atlanta-based Delta in 2008. That process is almost complete, and the airlines involved still continue to fly for Delta. Trans States Holdings Inc. of Bridgetown, Mo., is buying Compass.

Delta operates a hub locally at the Cincinnati/Northern Kentucky International Airport, the home base for Comair. Compass and Mesaba are both based in Minneapolis and will continue to feed Delta’s system under a new deal that extends until 2020.

The sale was for $82.5 million total for the two carriers ($62 million for Mesaba and $20.5 million for Compass). The amount is markedly less than what Delta got for its last sale – Atlantic Southeast Airlines to SkyWest for $425 million in 2005 shortly before Delta filed for Chapter 11 bankruptcy protection.

Delta bought Comair for $2 billion in early 2000, but that deal included Comair’s planes. Delta now owns the majority of all its regional jets or maintains the right to the leases, even at contracted carriers such as ASA and SkyWest.

Baur said the deal was made to continue to “streamline our Delta Connection regional network and improve our cost structure.” The airline has publicly said it is trying to lower the number of airlines flying regionally to between 4-5.

Comair has been rumored to be on the sales block for years, especially after the Sept. 11 terror attacks and then again leading into and during Delta’s bankruptcy reorganization.

Delta’s Baur said that Thursday’s sale did not impact Comair’s current flying contracts with Delta. In addition, the move of a crew base from New York to Detroit is still going on as scheduled, according to an internal memo released to Comair employees Thursday morning from airline president John Bendoraitis.

“Today’s news, which leaves Comair as Delta’s only remaining wholly owned regional airline subsidiary, will likely lead to questions about Delta’s plans for Comair going forward,” Bendoraitis wrote. “Most importantly, today’s announcement does not impact Comair’s flight schedule, operation or focus.”