Airtran goes for Midwest Airlines

[Wesb737fo]

$288 Mil....25 717's and a dozen MD-80's (350-400 pilots).
Offering $11.25 per share.
Current stock price around $9.08.
It will be interesting to see what the shareholders think. I know this is a dangerous question on this board, but I wonder how would the two pilot groups be merged.

 

[On Your Six]

At least this potential merger makes sense strategically, unlike the proposed USAirways/Delta combination with its huge route overlap and fleet complexity.

Glad to hear they would keep the fresh-baked cookies...

 

[njcapt]

I know this is a dangerous question on this board, but I wonder how would the two pilot groups be merged.

We could probably speak to each other over the fence if we raised our voices a little. In other words, I would expect little integration in the first several years.

It would be nice to drive to work in MKE, though.

 

[Taildragon]

Is airtran ALPA?

 

[Captainjerky]

Airtran/Midwest

And then they'd buy us folks at Skyway a bunch of spiffy new ERJ-190s and life would be good...

 

[Taildragon]

Great, (sarcastic) I just paid off my uniform!

 

[EX_CV580FR8Dawg]

And then they'd buy us folks at Skyway a bunch of spiffy new ERJ-190s and life would be good...

What would we be called? MidTran Connect?

PM me Jerky!

 

[Remington]

Is airtran ALPA?

They have an in-house union.

 

[737 Pylt]

$288 Mil....25 717's and a dozen MD-80's (350-400 pilots).
Offering $11.25 per share.
Current stock price around $9.08.
It will be interesting to see what the shareholders think. I know this is a dangerous question on this board, but I wonder how would the two pilot groups be merged.

It's real easy. Midwest is the acquired carrier, they get stapled below the Air Tran pilots!

737

 

[furloaded]

not so fast

Midwest is ALPA and any merger has to take the contract into account, which includes seniority list issues.

 

[Lear70]

Is airtran ALPA?

No, so ALPA's integration policy is out the window, as ALPA won't see the light of day here at airTran anytime soon... just WAY too many anti-ALPA pilots in the ranks.

*CAUTION* Speculation ahead:

That said,,, although it's a hostile takeover bid, the letter from AAI management says "merger". No, it's not semantics.

If Midwest were out shopping for a buyer, a staple might be the game of the day, but it's not. AAI will be wooing the shareholders at Midwest, and that calls for "playing nice" on all sides, even if it IS AAI money they're putting in their pocket and not the other way around.

The thought of an integrated seniority list pure DOH just SUCKS, especially if you've been hired in the last 2 years at AAI.

The Midwest crowd is WAY senior and the AAI pay rates in the FO seat are NOT comparable with the industry, so imagine getting stuck there an extra 2 or 3 years?

And yes, even fences wouldn't save your upgrade track. Most fences (historically speaking) simply keep CA's from getting bumped down or a pilot from being displaced out of their domicile. Future upgrades usually are not fence protected.

3-4 year upgrade is one of the primary benefits of coming here. Take that away and a lot of guys who were otherwise happy to stay put might start dusting off those resumes for the majors as they start ramping up hiring next year.

Ugly, ugly, ugly for the employees on the AAI side of the fence if they go DOH, and that will breed a LOT of animosity.

I've said it before, unless AAI is buying a carrier with a straight staple to the bottom of the list, I'd rather stay a stand-alone company as we seem to be doing just fine on our own. And no, this isn't a slam on Midwest, please don't take it that way, it's simply that I'd rather not merge with ANYONE at this point...

And yes, Lowecur, that includes both DFW and MDW where the loads are good (80%+ LF) and the fares about the same as they are anywhere else in our system (i.e. not drastically reduced in order to compete). More gates would have been even better in a market we seem to be faring just fine in (excuse the pun).

 

[Lear70]

Midwest is ALPA and any merger has to take the contract into account, which includes seniority list issues.

Yeah, but,,,

It really depends on your integration / merger policy as stated in your contract.

If your contract SPECIFICALLY has integration language, then any merger, acquisition, or even purchase would have to abide by that integration language.

If your contract does NOT have a section specifically dealing with this, and AAI is the purchasing carrier, guess what. You all just became new members of the NPA (National Pilots Association) at AirTran, a la' American/TWA (although I'm guessing DOH would be pushed).

So that's the question: does Midwest have integration / merger protection policy in your current contract or not?

 

[furloaded]

" In the event of a Successorship Transaction which results in an operational merger in which the Successor is an air carrier or any person or entity that controls or is under the control of an air carrier, the Successor shall provide the company's pilots with the seniority integration rights provided in section 3 and 13 of the Labor Protective positions specified by the Civil Aeronautics Board in the Allegheny-Mohawk merger.'' "... any such integration will not result in a system flush."

So whatever protections and rights are offered under the Allegheny-Mohawk merger will apply, whatever they may be.

 

[Lear70]

" In the event of a Successorship Transaction which results in an operational merger in which the Successor is an air carrier or any person or entity that controls or is under the control of an air carrier, the Successor shall provide the company's pilots with the seniority integration rights provided in section 3 and 13 of the Labor Protective positions specified by the Civil Aeronautics Board in the Allegheny-Mohawk merger.'' "... any such integration will not result in a system flush."

So whatever protections and rights are offered under the Allegheny-Mohawk merger will apply, whatever they may be.

The Allegheny-Mohawk merger was 1972 law where the two sides couldn't agree on seniority integration.

Without going into a lot of boring details, the law basically says that two carriers combining into a single operational unit (not maintained as two separate working groups) must join together under one bargaining unit.

The seniority rights of such a carrier would have to be worked out between the two unions or, if an agreement could not be reached, binding arbitration would then rule. NO law suits in other words.

No one can be forced to take a position at a lower income level than they already hold, or be paid a pretty large chunk of their current salary as compensation by a formula I can't remember right off hand.

Does NOT address seat position or relative upgrade potential, only keeps you from getting displaced to a lower-paying position.

There's been a couple of tests to this in federal appeals courts over the years. It's gone both ways, but the main thing to bear in mind is that the arbitrator has never been allowed to use pre-existing financial condition of either airline to influence what is "fair and equitable" to both pilot groups (In other words, the "you weren't going to have a job anyway so be happy to be stapled" argument doesn't hold).

Basically your group and ours would have to come together and decide seniority integration (or eventually an Arbitrator would be appointed), but ALPA would be eventually gone as the NPA is the union of the PURCHASING carrier. Would be the other way around if you guys were purchasing us.

 

[Wesb737fo]

From what I've heard this has been in the works for some time, but the Midwest Mgt. folks have been saying no thanks (Could you blame them, who wants to lose their job).

AAI went public with the information so the shareholders could see and decide what they want.

I don't have any idea how these things work, but I would guess the board and major shareholders at Midwest have known about this for some time. If Midwest management has convinced them that they can survive alone, I wonder what AAI going public with the offer can really do to convince them otherwise.

As far as DOH integration, Agreed that it would suck for FO's. I'm pretty sure that a good percentage of the roughly 200 FO's at Midwest are senior to the people here at AAI. I know most of you would laugh, but there has to be a fair solution.

 

[Captainjerky]

Name

What would we be called? MidTran Connect?

I'd call it MidAir Connect-Tran Airlines, doing business as Air MidWest Jet/Prop Connect Airlines.

 

[BoilerUP]

If Midwest management has convinced them that they can survive alone, I wonder what AAI going public with the offer can really do to convince them otherwise.

Midwest stock is up over 20% right now.

I'm sure it had something to do with making alot of wealthy people even richer.

Look at this six month chart for MEH stock. Its up 100% over the last six months. Even though MEH has had some small profits during that time, somebody has known about something happening...

 

[fletch717]

FWIW,

If the "merger" goes through, I see the integration of seniority as a ratio.
350 pilots to 1500 = 5 to 1 roughly with a 3 year fence.

 

[Wesb737fo]

Midwest stock is up over 20% right now.

I'm sure it had something to do with making alot of wealthy people even richer.

Look at this six month chart for MEH stock. Its up 100% over the last six months. Even though MEH has had some small profits during that time, somebody has known about something happening...

Boiler...I think you're on to something there. It must be nice to get insider info and not go to jail.

 

[PlaneDrvr]

"........but ALPA would be eventually gone as the NPA is the union of the PURCHASING carrier. Would be the other way around if you guys were purchasing us."

Someone can 'correct' me if I am wrong (and sure they will); but I don't think this is exactly correct??

If two carriers merge and both groups are 'represented' (union), by different unions/representation; there would have to be a vote by the combined group for 'representation' by one union or the other. I believe that is what is specified by Federal Labor Law; and it does not matter who bought who??

Just my $0.02.

DA