Delta Air Lines will sell two of its wholly owned regional airline subsidiaries, Mesaba and Compass Airlines. Mesaba has been sold to Memphis-based Pinnacle Airlines Corp. for $62 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, Delta said, with Pinnacle currently serving as one of Delta's largest regional carriers.
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.
"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,” Delta Connection Senior Vice President Don Bornhorst said.
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.
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. 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.