SkyWest: No Delta Talks, but Door Open

Speculation SkyWest Inc. might bid for Comair, the big Delta Air Lines regional subsidiary, resurfaced last week as soon as SkyWest announced it had agreed to buy rival ExpressJet.

The conjecture was stoked by published reports SkyWest chief financial officer Brad Rich had said the St. George-based airline would was capable of buying Delta's remaining regional carrier, and would consider it under the right circumstances.

On Monday, Rich said his widely circulated remarks were misconstrued, and he took great pains to adopt a position that neither ruled in nor out any future course of action involving Comair.

"At whatever point Delta decides they want to pursue some kind of a transaction, whether it be (hiring SkyWest to operate more Delta Connection flights) or selling off existing assets, if it met our criteria then we would certainly be willing to look it, just like we would be interested in any opportunity in our industry," he said.

Asked if he wants SkyWest to buy Comair, Rich refused to answer. "I think I'm not going to respond to that one," he said, adding that SkyWest is not talking to Delta about a deal.

"Nothing is going on. As far as I was concerned, I didn't know [whether Comair was] for sale," Rich said.

A Delta representative would say Monday only that the world's biggest airline is open to selling Comair, which is based in northern Kentucky, across the Ohio River from Cincinnati.

"We do not have to own our regional partners to derive value from them. We want to ensure that each partner airline is independently positioned for success with a competitive cost structure," Kristin Baur said in an e-mail.

Speculation about a SkyWest-Comair tie-up has circulated at least since 2005, when Delta sold its Atlantic Southeast Airlines subsidiary to SkyWest for $435 million. The two companies struck that deal one week before Delta filed for bankruptcy.

A year later, Rich told The Salt Lake Tribune SkyWest would be open to acquiring Comair if it could design a suitable deal but that Delta's intentions were unclear.

Talk of a link flared up once more last Wednesday, when SkyWest said it had agreed to buy ExpressJet for $133 million in cash, or $6.75 per share.

Some of the speculation may have based on SkyWest's persistence. Two years ago, ExpressJet rejected a $3.50-per-share offer from SkyWest.

Another reason could have been the timing of the SkyWest-ExpressJet deal. A month earlier, Delta agreed to sell the Mesaba and Compass airline units it inherited when it merge with Northwest Airlines in 2008 for which SkyWest did not bid.

At the time, Delta said nothing about Comair, which it had considered selling before merger talks with Northwest became a bigger priority. But published reports said Delta would hang on to Comair after getting no offers for the business it bought in 2000 for $1.8 billion.

SkyWest's reputation for financial soundness also generated buzz that SkyWest might make a run at Comair. Because SkyWest has one of the healthiest balance sheets in the airline industry, its name often surfaces when merger rumors fly, Rich said.