Delta Creates Feeder Mgmt. Unit

<B>Delta Creates Feeder Mgmt. Unit</B>

By David Jonas

Further securing its feeder system, Delta Air Lines last week completed its acquisition of Comair Holdings and created a new wholly owned subsidiary, Delta Connection Inc., to manage the Delta Connection program.

The acquisition of Comair, announced in October and eventually approved after a settlement with shareholders who were asking for a higher price, strengthens Delta's regional jet strategy and further bolsters its Cincinnati hub. Delta previously had acquired Atlantic Southeast Airlines to boost Atlanta feeder service and forged a pact with Atlantic Coast Airlines to create another East Coast Delta Connection provider.

The new Delta Connection Inc. will manage affiliations with all carriers in the Delta Connection program, which also includes Business Express, Trans States and SkyWest. Fred Reid, Delta's executive vice president and chief marketing officer, will serve as chairman of the new unit. David Siebenburgen, formerly Comair's president and COO, will serve as president and CEO.

Delta Connection immediately said it will begin a new best practices initiative among the affiliated carriers to maximize operating performance.

In other Delta news, the board of directors authorized the repurchase of $500 million of common stock. The carrier said the repurchase will be largely funded by earlier sell-offs of Priceline.com stock, amounting to $711 million through Dec. 31, 1999.

Delta also increased compensation for its non-union employees, including salary increases and an enhanced early retirement medical plan. Delta is the least unionized of all the major airlines.