ATLANTA (AP) -- Delta Air Lines is buying Atlantic Southeast Airlines, a regional carrier with connections to Delta hubs, for nearly $700 million in cash.
Delta already owns 28 percent of the regional airline's parent ASA Holdings Inc. and has agreed to buy the rest.Atlantic Southeast is Atlanta's largest regional air carrier with service to 37 markets. It also offers service to 21 airports from its second hub at Dallas/Fort Worth.
Leo F. Mullin, Delta's president and chief executive, said Tuesday in announcing the deal that the acquisition will increase service and access to Delta's route network and will strengthen financial performance through more efficient operations and better utilization of aircraft at both airlines.
ASA has been a Delta Connection carrier, flying passengers to Delta hubs under a code-share agreement.
"As we build on ASA's strengths, we not only will improve Delta's overall route network, but we also will be in position to increase traffic flows to our other connection partners," Mullin said.
ASA will retain its separate work force and salary and benefits structure, and its labor agreements with the Air Line Pilots Association and the Association of Flight Attendants will remain in place. The transaction will have minimal impact on ASA employment and there will be no impact on Delta employment, the companies said.
ASA, founded in 1979, has operated as a Delta Connection carrier since 1984. It has a fleet of 88 aircraft with 2,673 employees based in 40 cities.
Under terms of the agreement, a Delta subsidiary will make a tender offer to purchase all outstanding shares of common stock of ASA Holdings for $34 per share in cash. ASA Holdings has 28.5 million shares of common stock outstanding. Delta already owns 7,995,000 of those shares.
The deal is subject to regulatory review.