Comair In The Crosshairs

It's their turn... after wrestling sizable pay cuts and other concessions from workers at its mainline operation, Delta Air Lines put several routes flown by regional operators up for bid Wednesday, in an attempt to gain further concessions from its current regional carriers -- or their replacements.

The Atlanta Journal-Constitution reports Delta's request for proposal, or RFP, covers about one-fifth of Delta's regional routes and up to 143 aircraft. Most of those planes belong to Delta-owned subsidiary Comair, as well as independent carriers such as Chautauqua.

Analysts say the move isn't aimed as much as the independents, however, as it is at Comair -- which, like its parent airline, is also mired in Chapter 11 bankruptcy.

"They're trying to put some pressure on Comair," said CreditSights analyst Roger King -- adding other regional carriers included in the RFP that offer lower costs will likely see additional business from Delta, unless Comair cuts its own costs.

That may be tough, however, as Comair is also currently at a stalemate with its flight attendants -- who are threatening to strike if negotiations now underway fall through. Should that happen, other tentative agreements reached with the carrier's pilots and ground workers will likely fall apart, as well -- casting doubt on the very future of the airline.

Delta's bidding requests also hit a nerve with the head of the Air Lines Pilots Association, who vowed that unions at all Delta regional carriers will fight the airline's attempt to pit them against one another.

"They hope they can tie labor into underbidding each other," said ALPA President Duane Woerth. "We are going to negotiate together as a group. We are not going to bid against each other."

It's easy to understand why Delta is hoping to slash costs at its regional operations -- as in the first half of 2006, the airline spent $1.3 billion on contract regional service, excluding Comair.

Contracts of two of Delta's biggest regional contractors -- Skywest and Atlantic Southeast Airlines -- aren't being rebid, as they were locked in as part of Delta's sale of ASA to SkyWest last year.

"The work that's really at risk here is Comair work," said Woerth, who also stated he would not sign the tentative agreement between Comair and its pilots.

FMI: www.delta.com, www.comair.com