Delta Air Lines has announced that its carrier Comair will be shutting down this September. The 35-year-old regional carrier is now down to 290 flights a day and termination notices are going out to the remaining 1,700 employees.
Delta acquired Comair’s operations in 1984. Comair originally conducted over 1,000 daily flights and had over 7,000 employees. After filing for bankruptcy protection in 2005, Delta and Comair were able to pull through from reorganization in 2007.
Over the past seven years, Comair has been slowly downsizing its staff and fleet. Delta’s Chief Executive, Richard Anderson, explained that ,“The economics just simply do not work.” It has become too pricey to fuel the small regional jets. Fuel price per barrel is over five-times higher than originally expected.
Delta plans to reduce the number of 50-seat jets under their operation within the next two years. They will be trading in the small regional jets and upgrading to 76-seat and 117-seat planes. Comair only operates about one percent of Delta’s flights, so Delta does not expect significant delays due to the shut down.
Although Delta is not financially defaulting by shutting down Comair, many travelers have been rebuffed by bankrupt airlines. In these situations, travel insurance policies may provide protection with financial default benefits. These benefits provide coverage for when there is a complete suspension of airline operations due to financial circumstances. One policy, American Express Global Travel Shield Classic, offers travelers coverage for unforeseeable financial default of travel suppliers. American Express requires the financial default to occur at least seven days after the insurance policy is purchased. The details of this benefit will vary with each policy, so be sure to check the certificate and see what coverage is offered.