SkyWest catches Delta in a tough spot and snaps up ASA in a shrewd move

[Paul]

Three years ago, Delta Air Lines approached SkyWest with a question: Would the Utah-based holding company be interested in buying Delta's Atlantic Southeast Airlines subsidiary?

SkyWest chief executive Jerry Atkin was intrigued, and a conversation began. In early 2005, the talk turned serious, and in August the two companies announced a deal.

Suddenly, SkyWest, founded in 1972 as a puddle jumper to fly business travelers between St. George and Salt Lake City, had morphed into the largest and among the most profitable independent regional carriers in the United States.

To put the deal in perspective, SkyWest was buying an airline not much smaller than itself. Atlanta-based ASA's revenues were close to $1 billion last year. It employs about 5,700 people and last year it carried 12 million passengers.

The deal was hard to refuse. For $425 million, SkyWest was getting an airline that bankrupt Delta had bought in 1999 for $700 million. Since then, ASA had more than doubled in size, adding more than 100 regional jets and nearly 3,000 employees.

Salt Lake Tribune

 

[coolflyingfool]

Great news for Skywest. I wonder when they will acquire a bigger jet?

 

[corl737]

Great news for Skywest. I wonder when they will acquire a bigger jet?

I'm sure they'll continue to evaluate the appropriateness of their fleet as it applies to their business plan.

Does anyone know if SkyWest operates any routes under their own brand name or are they 100% pay-for-departure contracted with the majors? I'd guess that larger aircraft may not be allowed under such contracts.*


*Disclaimer: I know very little about the regional/major marketing agreements so I'm open to being learnt a lesson!

 

[lostplanetairman]

Does anyone know if SkyWest operates any routes under their own brand name or are they 100% pay-for-departure contracted with the majors? I'd guess that larger aircraft may not be allowed under such contracts.*
*Disclaimer: I know very little about the regional/major marketing agreements so I'm open to being learnt a lesson!

They fly for Delta and United only--both of which have scope provisions that will limit the size of the aircraft flown by SkyWest or ASA.

 

[Management Guru]

or are they 100% pay-for-departure contracted with the majors?

Part of the United Express flying is "at risk", routes chosen and costs covered by Skywest and not paid for by United. The ones I know of are FAT-LAS and PSP-LAS. There are probably others but no more than 5-10% of the Skywest ops for UAX.

 

[jimmyd]

Delta Connection/Skywest Brasilia flying is "at-risk" while the CRJ flying is fee-for-departure. The 30 seat Brasilia's account for 20% of their systemwide Delta (excluding ASA) dept's

 

[USXboy]

dang... $400 million for an operation Delta paid $700 million for.. makes a lot of sense!