DELTA EASES OFF COMAIR DEADLINE

Cincinnati Enquirer
August 29, 2006
By Alexander Coolidge


CINCINNATI — Because of the crash investigation at Comair, Delta Air Lines said it might relax a critical Sept. 18 deadline that could shrink its Kentucky-based subsidiary's operations.

Meanwhile, industry experts said the crash was unlikely to hurt customer loyalty or discourage passengers from flying either Delta or Comair in the long term.

Just days before Sunday's crash, bankrupt Delta put Comair on notice that it was putting a large chunk of its regional flying out to bid.

The move renewed pressure on Comair to get cost cuts from its unions. Comair has tried for most of the year to win pay and benefit concessions from its unionized employees.

"We're focused on the families of those involved in the accident, our customers and employees," Delta spokesman Anthony Black said. "We will evaluate the RFP (request for proposals) deadline at a later time if we need to."

Last week, Delta effectively forced Comair to audition for its job feeding passenger traffic to mainline operations. Delta said it would seek lower bids by Sept. 18 on future and existing regional flying. The move put up for grabs 27 70-seat jets and an undetermined number of 50-seaters flown by Comair, which the airline said could jeopardize 600 or more jobs.

Comair officials confirmed that they are scheduled to negotiate with the mechanics' union Thursday.

Mike Boyd, an aviation consultant in Evergreen, Colo., said the crash isn't likely to cause financial problems for Delta and Comair since insurance would likely cover any liability the carriers might face.

Doug Talley, chief executive of Cleveland management consulting firm Risk International Services Inc., said the airline would be covered by aviation liability insurance, while manufacturers would be covered by aircraft product liability insurance. He said transportation by air was generally safe, but operators carry a lot of insurance to cover accidents that can result in scores of injuries and deaths.

"Settlements for each passenger can easily hit seven figures, especially business travelers that might have years of lost wages," he said.

Boyd and other experts said it was unlikely the crash would drive customers from Comair or Delta.

"Delta is such a quality airline, I don't think there will be a consumer backlash," he said, adding that customers couldn't shun Comair since Delta corporate decides whether passengers fly on its mainline jets or one of its regional aircraft.

"Nobody bought a Comair ticket — they bought Delta tickets," he said.

Boyd said Comair president Don Bornhorst projected the right mix of concern and authority needed after the crash Sunday.

"Bornhorst was well prepared and didn't pass it off to some PR guy — it shows a great operation," he said.

Aaron Gellman, an economics professor at Northwestern University who follows the airline industry, said, "I don't think it will have any effect — it's one incident of a long history of a safe enterprise."