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SkyWest May Be Interested in Buying Delta Air Lines' Comair, CFO Rich Says
“The market is getting so competitive, and the inability of the transportation industry to generate profit requires more efficiency, which will be created through consolidation,” Brad Rich, chief financial officer of St. George, Utah-based SkyWest, said today in an interview.
SkyWest’s agreement to buy Houston-based ExpressJet for $6.75 a share in cash, or a net price of about $133 million, is the third proposed purchase of a U.S. regional airline since July 1. Delta agreed that day to sell Mesaba to Pinnacle Airlines Corp. and Compass to Trans States Holdings Inc.
“We are not advocates of consolidation if the consolidation doesn’t lead to efficiency and productivity,” said Rich, 49.
Delta considered selling Comair, its commuter carrier, in 2007, then postponed a decision while the Atlanta-based company held merger talks with Northwest Airlines Corp.
“We are certainly capable of that type of transaction,” said Rich, who has been SkyWest’s finance chief since 1991. “We think it’s a transaction that could bring value to one of our major partners, in this case Delta.”
Delta is continuing to explore alternatives for Comair, Kristin Baur, a Delta spokeswoman, said in an e-mail.
‘Positioned for Success’
“Delta has stated previously that we do not have to own our regional partners to derive value from them,” Baur said. “We want to ensure that each partner airline is independently positioned for success with a competitive cost structure.”
SkyWest’s interest in Cincinnati-based Comair depends on what kind of transaction Delta would want, Rich said.
“They just sold two of their carriers, and we looked at those opportunities and obviously we didn’t pursue them,” he said. “It just depends if Delta’s objectives match up with our objectives.”
Comair operates 97 aircraft with 2,500 employees, she said. The aircraft are a mixture of owned and leased, and all are CRJ’s built by Bombardier Inc.