Delta to Shut Down Comair

Closure is part of broader shift away from 50-seat commuter planes

   
Delta to Shut Down Comair

Delta Air Lines (NYSE:DAL) on Friday announced plans to shutter its regional commuter unit Comair in a letter to employees, part of its plan to reduce the number of 50-seat air crafts to 125 over the next 25 years.

Comair, which was founded in 1977 and acquired by Delta in 1999, will close its doors Sept. 29. Delta already had decided to remove Comair’s 16 costly 50-seat planes out of the rotation, leaving the subsidiary with just 28 planes in all. However, because of the higher unit costs this move would cause, Delta ultimately came down in favor of ceasing Comair operations entirely.

Delta sold off commuter units Mesaba and Compass two years ago, and tried but failed to find a buyer for Comair at that time.

In recent years, Comair found itself among the last remaining remaining regional airlines under the full ownership of a network carrier, with most companies — like United Continental Holdings (NYSE:UAL) and US Airways Group (NYSE:LCC) — outsourcing their commuter flights.

Comair, which employs 1,700, accounts for only 1% of Delta flights, and it’s closure is unlikely to result in any significant changes to the Delta network.

As of late Friday morning, DAL stock was up slightly.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/delta-to-shut-down-comair/.

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