News
Big Sky airlines will be sold
Mesaba Holdings Inc., a regional air carrier affiliated with Northwest Airlines, said Thursday it would buy Big Sky Transportation Co. for about $3.5 million in cash.
Big Sky, based in Billings, provides regional air service to 20 cities in Montana, North Dakota, Washington, Colorado and Idaho.
By BECKY SHAY and the Associated Press
The companies agreed that Mesaba would pay $2.60 a share for all outstanding Big Sky stock. Big Sky traded for 50 cents a share on the Pacific Stock Exchange Thursday.
Big Sky Chief Executive Officer Kim Champney said the stock purchase will give Big Sky a brighter financial future.
"We’re thrilled as a company, we’re thrilled for our shareholders and our employees," Champney said Thursday night. "This is really a very, very good deal for Big Sky. The holding company purchasing us provides a lot of financial stability for us in the future."
If everything goes as planned – including Big Sky meeting conditions such as discussing issues with employee groups represented by unions and proving its financial stability – Mesaba should commence a tender offer on the Big Sky stock sometime in late October, Champney said.
Securing the airline’s future now is important because small, independent companies like Big Sky are not immune to the troubles large airlines are experiencing, Champney said. The purchase gives Big Sky added confidence in a difficult business climate.
"We benefit from the certainty of the future," Champney said. "You know, it’s a crazy industry, a lot of the airlines are laying off people. This gives us the financial strength to move forward without having to face those possibilities.
"It’s been tough since 9-11. … this gives us the confidence to be able to move forward in a time when there’s really not a great lot of certainty for a lot of companies out there."
Champney said Big Sky operations after the stock purchase will remain similar to the company’s current offerings.
"Big Sky will continue to exist just as we do today, only we’ll have a new ownership structure," he said. "If everything goes as we all hope it will, it will just be a transfer of shares – with a financially stronger parent company."
Big Sky and Mesaba have been working on the deal for about eight weeks. "There have been a lot of boxes to check off for a couple of months now," Champney said.
Mesaba plans to operate Big Sky as a wholly owned subsidiary. Mesaba Holdings expects the transaction to have no effect on its fiscal year 2003 earnings and add slightly to earnings in fiscal year 2004.
Champney said the acquisition is taking place because Mesaba "likes what we do," including priorities such as having "good and safe" operations.
"They don’t want to make any changes. They think we are on the right plan. They just want to be here to help us achieve the growth and plans we have for the future," he said.
Big Sky was started in Billings on Sept. 11, 1978. It employs 175 people in Billings and more than 270 systemwide.
The company recently has begun offering service to Boise, Idaho. It also plans to begin regular flights to Gillette and Casper, Wyo., beginning Oct. 21. The Wyoming cities worked to bring in a new air carrier by teaming up to get a federal grant for buying an airplane they will lease to Big Sky Airlines.
"Big Sky is a good example of the type of opportunity we are seeking," said Paul Foley, Mesaba Holdings president and chief executive officer. "It is an efficiently run company with an excellent safety record and a cost structure that positions it well in the highly competitive regional airline marketplace."
Mesaba serves 106 cities in 24 states.
Copyright © The Billings Gazette, a division of Lee Enterprises.
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