Delta Air Lines Sells Mesaba, Compass Airline Subsidiaries

Delta Air Lines has entered into definitive agreements to sell two of its wholly owned regional airline subsidiaries, Mesaba and Compass Airlines.

 Mesaba has been sold to Memphis, Tenn.-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, with Pinnacle currently serving as one of Delta's largest regional carriers.

Under the terms of the agreements, Mesaba and Compass will continue to serve Delta customers with long-term, extendable agreements, ranging from seven to twelve 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.

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.

Current plans are for Mesaba and Compass Airlines to operate as wholly owned subsidiaries of Pinnacle Airlines Corp, Inc. and Trans States Holdings, Inc., respectively.

 The transactions are not expected to result in any changes in flight schedules or locations served and Compass and Mesaba's combined fleet of nearly 130 aircraft will continue to be dedicated to flying Delta routes.

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