SkyWest deal: St. George-based firm buys Delta's ASA

St. George-based SkyWest Inc. said Monday it has agreed to buy Atlantic Southeast Airlines from its parent company, Delta Air Lines, for $425 million in cash.

The deal will give Atlanta-based Delta, which is battling to avoid bankruptcy, money to pay down debt, the company said.

SkyWest said the deal makes it the nation's largest regional airline and provides an opportunity to further grow its operations and expand its footprint.

The sale, pending regulatory approvals, is expected to close in September.

Jerry Atkin, SkyWest chairman, president and chief executive, told the Deseret Morning News the two companies had been working on this deal for "quite a while," trying to come up with an agreement that would be workable whether or not Delta files for bankruptcy.

"We've had an important strategic relationship with Delta for some time in Utah, and we saw this as an opportunity to expand and strengthen the relationship," Atkin said. "We saw we could do it in a way that we could add value to both ASA and SkyWest, by operating them separately — by taking some of the best practices at ASA and the best practices at SkyWest and get them into both carriers to improve quality to our customers, and in terms of cost efficiency as well. This was a good business opportunity."

Though SkyWest saw risk both ways — whether Delta declares bankruptcy or not — Atkin said the agreement the parties settled on is viable and will enable SkyWest to become one of the nation's most competitive regional carriers.

For Delta Connection, it was a natural melding of two important regional players, said J.T. Fisher, president of Delta Connection Inc.

"ASA has really been our gem of Atlanta," Fisher told the Deseret Morning News. "It is the anchor tenant at our Atlanta hub, which is one of the largest hubs in the world. SkyWest has been our West Coast presence, to such a great degree. By doing this, (SkyWest) demonstrated that it is a top-quality management team, a top-quality operator in the industry, bar none."

And for Delta?

"As we continue to implement Delta's transformation plan, this transaction not only enhances our ability to operate our business as efficiently and cost effectively as we can, it also improves Delta's liquidity position," said Gerald Grinstein, Delta's chief executive officer, in a statement. "As Delta takes steps to secure its future as a competitive airline, we will continue to take a hard look at all of our operations and assets to identify opportunities to strengthen our financial position in the face of continuing market pressures and factors outside of our control, including fuel prices."