Delta sells subsidiaries Mesaba, Compass to Pinnacle, Trans States

Delta Air Lines said yesterday it has entered into definitive agreements to sell subsidiaries Mesaba and Compass Airlines, both of which it acquired in its merger with Northwest Airlines, for a combined $82.5 million.

Mesaba was purchased by Memphis-based Pinnacle Airlines Corp., parent of Pinnacle Airlines and Colgan Air, for $62 million. "This transaction brings together very strong and very similar organizations," Pinnacle President and CEO Phil Trenary said. "Even as long-time competitors, Pinnacle and Mesaba have always had tremendous respect for one another…We have very similar fleets of regional jets and turboprops, and we fly complementary routes with schedules that are already integrated as part of Delta Connection."

Compass was sold to St. Louis-based Trans States Holdings, parent of Trans States Airlines and GoJet Airlines, for $20.5 million. "Compass Airlines has an excellent reputation for providing safe, high-quality and reliable airline service," Trans States President Rick Leach said.

Under the terms of the agreements, Mesaba and Compass will continue to operate Delta Connection flights under "long-term, extendable agreements ranging from 7-12 years depending on aircraft type," DL said. Leach said Trans States is "looking forward to the 10-year partnership with Delta Air Lines, the largest airline in the world. This new relationship, along with our other partnerships, positions us very well to take advantage of future opportunities in the regional airline sector."

Both Mesaba and Compass will continue to be headquartered at Minneapolis-St. Paul International and current presidents John Spanjers and Tim Campbell respectively will continue to helm the carriers.

Delta Connection Senior VP Don Bornhorst said the sales are aimed at "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." DL added that "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."

Mesaba operates more than 430 daily flights to 95 airports with a fleet of 96 aircraft. It employs nearly 2,000. Compass operates more than 170 daily flights to 35 airports with a fleet of 36 aircraft. It employs 1,000.