MINNEAPOLIS-ST. PAUL, July 1 /PRNewswire-FirstCall/ -- Delta Air Lines, Inc. (NYSE: DAL) today announced it has entered into definitive agreements to sell two of its wholly owned regional airline subsidiaries, Mesaba and Compass Airlines. Mesaba has been sold to Memphis, Tenn.-based Pinnacle Airlines Corp. (Nasdaq: PNCL) for $62.0 million, and Compass has been sold to St. Louis-based Trans States Holdings, Inc. for $20.5 million. Pinnacle and Trans States are both large and experienced regional airline operators, with Pinnacle currently serving as one of Delta's largest regional carriers.
Under the terms of the agreements, Mesaba and Compass will continue to serve Delta customers with long-term, extendable agreements, ranging from seven to 12 years depending on aircraft type. Both Mesaba and Compass will continue to be headquartered in Minneapolis-St. Paul with current presidents John Spanjers and Tim Campbell, respectively, leading the airlines under new ownership.
Delta Connection Senior Vice President Don Bornhorst said, "Today's announcement reflects our continued focus on streamlining the portfolio of Delta Connection carriers serving our customers to ensure each partner airline is independently positioned for success with a competitive cost structure and an industry-leading focus on safety, reliability and customer service.
"In recent years, the Delta Connection carriers have made substantial progress in creating a consistent customer experience across our brand with more First Class cabins, enhanced food service, jetbridge boarding and other amenities Delta customers expect when they fly Delta or Delta Connection flights. This transaction is another step in positioning our regional airlines for future success and we look forward to delivering even more improvements to customers in the more than 260 communities our partners serve."
The structure of the Mesaba and Compass transactions provides for long-term competitive cost structures at both airlines, as well as incentives to reward Mesaba and Compass for operational excellence and cost improvement.
Customer Service and Routes
In conjunction with the sale of both carriers, Delta will enter into new Delta Connection agreements under which Mesaba and Compass Airlines will continue to serve as Delta Connection carriers.
Current plans are for Mesaba and Compass Airlines to operate as wholly owned subsidiaries of Pinnacle Airlines Corp, Inc. and Trans States Holdings, Inc., respectively. The transactions are not expected to result in any changes in flight schedules or locations served. Compass and Mesaba's combined fleet of nearly 130 aircraft will continue to be dedicated to flying Delta routes.
Compass and Mesaba's new owners – Pinnacle and Trans States – are long-standing regional airline operators with years of experience working with Delta and other major airlines.
Pinnacle Airlines Corp., an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Pinnacle Airlines, Inc. operates a fleet of 142 regional jets under the Delta Connection brand. Colgan Air, Inc. operates a fleet of 48 regional turboprops as Continental Connection, United Express and US Airways Express.
Trans States Holdings, Inc. is the parent company of two regional airlines – Trans States Airlines and GoJet Airlines. Together, Trans States Holdings' regional airlines' 1,400 employees serve nearly five million passengers annually to 69 cities on 330 daily flights. Trans States currently operates flights as United Express and US Airways Express.
The proceeds from these transactions will be used by Delta for general corporate purposes.
Based in Minneapolis-St. Paul, Mesaba is a member of the Delta Connection program, operating more than 430 flights each day to 95 airports. The airline operates a fleet of 96 aircraft and employs nearly 2,000 aviation professionals across its route system. Founded in 1944, Mesaba has operated as a Northwest Airlink and Delta Connection carrier since 1984.
Compass is a member of the Delta Connection program, operating more than 170 flights each day to 35 airports. Based in Minneapolis-St. Paul, the airline operates a fleet of 36 aircraft and employs nearly 1,000 aviation professionals across its route system.
About Delta Connection
Based in Minneapolis-St. Paul, Delta Connection operates the world's largest regional airline system, with more than 670 aircraft operated by nine regional airline partners. Nearly 200 of those aircraft provide dual-class service. Each day more than 3,600 Delta Connection flights take Delta customers to over 260 destinations throughout North America, Latin America and the Caribbean.
About Delta Air Lines
Delta Air Lines serves more than 160 million customers each year. With its unsurpassed global network, Delta and the Delta Connection carriers offer service to 358 destinations in 66 countries on six continents. Delta employs more than 70,000 employees worldwide and operates a mainline fleet of nearly 800 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France KLM. Including its worldwide alliance partners, Delta offers customers more than 16,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, the world's largest airline loyalty program; the award-winning BusinessElite service; and more than 45 Delta Sky Clubs in airports worldwide. Customers can check in for flights, print boarding passes, check bags and review flight status at delta.com.
SOURCE Delta Air Lines