Delta Sells Off SAirGroup Shares

<B> Delta Sells Off SAirGroup Shares</B>

By David Jonas

As part of the ongoing process of severing ties with its former allies, Delta earlier this month sold more than 500,000 shares of Swissair parent SAirGroup and 35.2 million shares of Singapore Airlines, stakes it had held for about a decade. The move signaled the last chapter in the Delta-Singapore-Swissair partnership that began in 1989 and operationally ended in 1997. The sell-off of SAirGroup shares also falls in line with the disbanding of the Atlantic Excellence partnership.

The sale of SAirGroup shares resulted in a before-tax gain of $29 million and cash proceeds of $114 million, while the Singapore divestment garnered a before-tax gain of $140 million and a net cash amount of $75 million. Delta simultaneously repurchased 5 million shares of its own stock that Singapore had held. Swissair also sold all of its 8 million Singapore shares.

Delta had been in discussions with Austrian, Sabena and Swissair about inclusion into the new alliance formed with Air France, but the three carriers opted instead for other global partnerships. According to Delta, the four Atlantic Excellence members agreed to honor existing travel agency and corporate sales agreements through Dec. 31, maintain codeshares through Aug. 5 and continue to offer frequent flyer reciprocity until further notice.

Meanwhile, Delta earlier this summer earned an additional $115 million in before-tax proceeds when it sold 1.8 million shares of Priceline.com. The carrier maintains ownership of the air service auction Web site with 16.8 million fully vested stock warrants.