Midwest, AirTran what's the right price?

[Eagle757shark]

Midwest's board of directors on Jan. 25 recommended that shareholders reject AirTran's $13.25-a-share cash and stock tender offer. When queried by an audience member as to whether Midwest would be interested in a deal if AirTran were to raise its per-share offer to a specified level, Scott Dickson Midwest Senior Vice President and Chief Marketing Officer said: "There are lots of potential outcomes and the board and management team of Midwest is not going to speculate on those. We've made our position very clear. The best value for our shareholders and stakeholders is to have Midwest Airlines continue to execute its business plan."
This was quoted in The Business Journal of Milwaukee in the article: AirTran 'desperate', Midwest executive says dated 2/8/2007.
So the question,what price will bring these two airlines together?

 

[ultrarunner]

Twenty bucks.

 

[TV9Driver]

At this point, just let Midex go. They don't want to join up with us. Apparently we are not good enough for MKE's traveling public.

I am surprised that the pilots are against it though. It would appear to be a good deal for them - more airplanes (other than md80's) more upgrade possibilities, a more secure future, no new rj's coming in to steal their flying...etc...

Good luck to everyone involved (God know's we need it)

 

[ultrarunner]

I'd have to agree with you there TV. If anything the pilot group would actually see some growth opportunity.

As it stands now, once all the contract flying is built up, I would see mainline as the smaller of the operation.

 

[likeitis]

$18/share of which at least $14 in cash. But the money isn't the thing that is really holding this thing up. What is holding this up is the fear that none of the Midwest business model will be incorporated into the new carrier and the people of Wisconsin who are used to producing quality product will now be forced to ride on Jerry Springer's airline.

I don't say this to take anything away from the flight crews at AirTran but you can have the nicest most hardworking employees in the world but it won't make a difference unless management promotes mutual respect for the employee and gives them the tools and training to provide real customer service. I worked at AirTran years ago and lived in ATL and I would not tell anyone where I worked because that would mean that I would have to sit through 15 minutes of how they were fcuked the last time they flew FL. Now at YX I have yet to be told a single bad story from anyone I have met. Even stories where we actually dropped the ball, the customers aren't pissed because our people are so well trained at damage control.

The very people who produce Sub-Zero fridges, Viking ranges, HD motorcycles, Kohler bathroom fixtures, Briggs & Stratton engines, Allen Edmunds shoes, Wolf ovens, Manitowoc commercial freezers, Manitowoc cranes, North sails, Oshkosh trucks and Trek bicycles to name a few will not have a viable quality option for air travel if this thing goes through as simply a larger AirTran.

 

[fam62c]

I'm not sure what the correct price is but it doesn't look like it's going to happen at $13.25. AirTran started out aggressively enough but they didn't put up enough cash to get it done. I also don't think they anticipated the level of resistance they encountered. I think they will end up walking away from the takeover attempt at least for now and watch what happens with MEH.

The people who run MEH have created some pretty big expectations for the shareholders and we will have to see whether or not they can make their numbers and hold the stock price up if the AAI offer goes away. In the past nobody paid any attention to what the management team at MEH did and they were under no pressure whatsoever to produce results. The company lost money for 5 years, almost went bankrupt and reduced a $35/share stock to $1.50/share and the CEO kept his job. MEH shareholders are the most passive group that there is. With AirTran waiting in the wings the folks at MEH will be looking over their shoulders and they will have to produce results if they want to remain independent. I wonder if AirTran has a plan-B? They have said that MKE is an underserved and overpriced market and that MEH is vulnerable to low-cost competition; let's see if they believe that enough to come to MKE and take MEH on. If they can't buy them now maybe they will try to beat them into submission. In any case, without a significantly higher offer from AAI or a major drop in MEH share price I would say that this deal is done for now.

 

[Eagle757shark]

$18/share of which at least $14 in cash. But the money isn't the thing that is really holding this thing up. What is holding this up is the fear that none of the Midwest business model will be incorporated into the new carrier and the people of Wisconsin who are used to producing quality product will now be forced to ride on Jerry Springer's airline.

I don't say this to take anything away from the flight crews at AirTran but you can have the nicest most hardworking employees in the world but it won't make a difference unless management promotes mutual respect for the employee and gives them the tools and training to provide real customer service. I worked at AirTran years ago and lived in ATL and I would not tell anyone where I worked because that would mean that I would have to sit through 15 minutes of how they were fcuked the last time they flew FL. Now at YX I have yet to be told a single bad story from anyone I have met. Even stories where we actually dropped the ball, the customers aren't pissed because our people are so well trained at damage control.

The very people who produce Sub-Zero fridges, Viking ranges, HD motorcycles, Kohler bathroom fixtures, Briggs & Stratton engines, Allen Edmunds shoes, Wolf ovens, Manitowoc commercial freezers, Manitowoc cranes, North sails, Oshkosh trucks and Trek bicycles to name a few will not have a viable quality option for air travel if this thing goes through as simply a larger AirTran.

Ex-workers sue AirTran over unpaid breaks

Three former AirTran Airways employees who worked at the Fort Lauderdale-Hollywood International Airport have filed a lawsuit against the airline.

By INA PAIVA CORDLE

[email protected]

Three former AirTran Airways customer service agents who worked at the Fort Lauderdale-Hollywood International Airport have sued the airline, alleging they were forced to work through lunch breaks without getting paid.
The suit, filed in Broward Circuit court last week, alleges that AirTran deducted the hourly workers' wages for the 30-minute breaks, violating minimum wage laws.
''Breaks are meant for safety -- they are supposed to have a break to give them relief from the pressures of the job,'' said Lawrence McGuinness, a Miami lawyer who represents the former AirTran employees. ``It's also illegal if you are taking money away from these people, so AirTran gets free workers.''
AirTran spokeswoman Judy Graham-Weaver said the airline has not received notification of the lawsuit and therefore could not respond.
At least 3,500 workers nationwide could make up the potential pool of current and former AirTran employees subject to the alleged violation, McGuinness said.
The plaintiffs, Robert Smith, 39, of Fort Lauderdale; Jeffrey Grinell, 35, of Wilton Manors; and Claudia Lopez, 38, of Sunrise, were former customer service/ramp workers of the Orlando-based airline. They worked at both the presecurity ticket counters and the post-security gates at Fort Lauderdale-Hollywood, McGuinness said.
Each has also recently filed charges of discrimination with the Civil Rights Division of the Broward County Office of Equal Opportunity, alleging discrimination based on sexual orientation, he said.
Graham-Weaver said the airline was not aware of the discrimination allegations, so she could not comment.
McGuinness said he was first contacted regarding the discrimination charges, and each said they had ''experienced the same derogatory remarks and downright hostility.'' It was during those client meetings that he discovered the alleged 30-minute break violations, ``which shows AirTran has some significant employee-employer problems.''
He said he is seeking an as-yet unspecified reimbursement of wages, as well as that AirTran stop the practice of making employees work through their breaks.
''It's an issue of hiring and staffing,'' he said.
Such alleged violations are typically associated with very small firms in the underground economy, said Annette Bernhardt, deputy director of the Justice Program at the Brennan Center for Justice, at NYU School of Law.
''This case really illustrates that the constant search to reduce labor costs can result in illegal practices,'' she said, ``even in large, established firms.''
_krdDartInc++;document.write('');

 

[Eagle757shark]

If this merger does go through, hopefully things like this will change.

 

[likeitis]

Let's hope this doesn't start a snowball effect like what happened at Wal-Mart with all the employees seeing that they now have a voice and can be heard. If this is indeed true then the blame should be put where it belongs, at the top because they breed this attitude in their middle managers. For everyone's sake lets hope that S.K and K.G. have their hands in this and they receive their due. Miserable humans these two are. An embarrassment to the species.

 

[Lear70]

Let's hope this doesn't start a snowball effect like what happened at Wal-Mart with all the employees seeing that they now have a voice and can be heard. If this is indeed true then the blame should be put where it belongs, at the top because they breed this attitude in their middle managers. For everyone's sake lets hope that S.K and K.G. have their hands in this and they receive their due. Miserable humans these two are. An embarrassment to the species.

Don't hold back now; tell us how you really feel about it.

I thought this was a "done deal". Obviously one of those cases where I'm more than likely gonna be wrong.

FAM62C has it right: when this deal dies, there's gonna be a LOT of expectations from the shareholders there. If they don't live up to it within a year or two, we'll probably see new heads at the top of the food chain, or maybe even another hostile takeover attempt at a much lower stock price.

In the meantime, I'm looking forward to my 3 year upgrade.

Cheers! :beer:

 

[gt1900]

Don't be suprised if and when the merger doesn't go through to see AAI start adding flights out of Milwaukee anyways, just like when SWA outbid AAI in Chicago.. There may be a few die hard Midwest suporters out there, but when people have a choice, they buy the cheapest ticket. That's why priceline, orbits, and all the others are out there. There is a lot or room for expansion out of Milwaukee, and it doesn't seem that Midwest has the ability to grab the oportunity's... It still amazes me they anounced Kansas City to Seattle and not Milwaukee to Seattle. Are they aware their gonna go head to head with SWA on that route, when they could have had the Seattle to Milwaukee market all to themselves?? Decisions like that make me wonder..

 

[Eagle757shark]

Don't be suprised if and when the merger doesn't go through to see AAI start adding flights out of Milwaukee anyways, just like when SWA outbid AAI in Chicago.. There may be a few die hard Midwest suporters out there, but when people have a choice, they buy the cheapest ticket. That's why priceline, orbits, and all the others are out there. There is a lot or room for expansion out of Milwaukee, and it doesn't seem that Midwest has the ability to grab the oportunity's... It still amazes me they anounced Kansas City to Seattle and not Milwaukee to Seattle. Are they aware their gonna go head to head with SWA on that route, when they could have had the Seattle to Milwaukee market all to themselves?? Decisions like that make me wonder..

With a firm order of 60 aircraft still to come, they may go into MKE if the merger doesn't go through. AirTran could also expand out of St Louis, Indianapolis, or maybe even Kansas City. I don't know what the plan is. Heck there could even be another merger on the horizon with some other carrier.

 

[ultrarunner]

With a firm order of 60 aircraft still to come, they may go into MKE if the merger doesn't go through.

They're gonna need some gates, ya think?

 

[WalterSobchak]

Ex-workers sue AirTran over unpaid breaks

Three former AirTran Airways employees who worked at the Fort Lauderdale-Hollywood International Airport have filed a lawsuit against the airline.

By INA PAIVA CORDLE

[email protected]

Three former AirTran Airways customer service agents who worked at the Fort Lauderdale-Hollywood International Airport have sued the airline, alleging they were forced to work through lunch breaks without getting paid.
The suit, filed in Broward Circuit court last week, alleges that AirTran deducted the hourly workers' wages for the 30-minute breaks, violating minimum wage laws.
''Breaks are meant for safety -- they are supposed to have a break to give them relief from the pressures of the job,'' said Lawrence McGuinness, a Miami lawyer who represents the former AirTran employees. ``It's also illegal if you are taking money away from these people, so AirTran gets free workers.''
AirTran spokeswoman Judy Graham-Weaver said the airline has not received notification of the lawsuit and therefore could not respond.
At least 3,500 workers nationwide could make up the potential pool of current and former AirTran employees subject to the alleged violation, McGuinness said.
The plaintiffs, Robert Smith, 39, of Fort Lauderdale; Jeffrey Grinell, 35, of Wilton Manors; and Claudia Lopez, 38, of Sunrise, were former customer service/ramp workers of the Orlando-based airline. They worked at both the presecurity ticket counters and the post-security gates at Fort Lauderdale-Hollywood, McGuinness said.
Each has also recently filed charges of discrimination with the Civil Rights Division of the Broward County Office of Equal Opportunity, alleging discrimination based on sexual orientation, he said.
Graham-Weaver said the airline was not aware of the discrimination allegations, so she could not comment.
McGuinness said he was first contacted regarding the discrimination charges, and each said they had ''experienced the same derogatory remarks and downright hostility.'' It was during those client meetings that he discovered the alleged 30-minute break violations, ``which shows AirTran has some significant employee-employer problems.''
He said he is seeking an as-yet unspecified reimbursement of wages, as well as that AirTran stop the practice of making employees work through their breaks.
''It's an issue of hiring and staffing,'' he said.
Such alleged violations are typically associated with very small firms in the underground economy, said Annette Bernhardt, deputy director of the Justice Program at the Brennan Center for Justice, at NYU School of Law.
''This case really illustrates that the constant search to reduce labor costs can result in illegal practices,'' she said, ``even in large, established firms.''

I was an AirTran CS/Ramp agent and worked often worked 8-10 (sometimes 12) hour shifts with no real break. Usually because some lazy arse was off playing "wand toss" instead of working. Therefore, those of us who were hard working folks really started to look elsewhere or look to moving up. It was my inspiration to get my dispatch license.

But it is true, at most stations, the station management are taught to work the employees to the bone...a big reason for outstation turnover. However, because of turnover, disciplinary actions against employees that don't pull their weight are few and far between.

Ol' JL was once quoted in Airline Transport World Magazine as saying, "We work our employees harder and we make no excuses for that". Let me tell ya, I'm pretty sure that article made it's way to just about every breakroom bulletin board in the AirTran system...I know it did in my station.

AirTran pilots and F/A's...great guys and gals and I loved working with most of them...but AirTran station management sucks for the most part. The supervisors and managers that really try hard to make their employees happy...they seem to always wind up being forced out of their position...or in the case of a couple of sups I worked for, they are repeatedly interviewed for Station Manager positions and always turned down (usually in favor of some NWA retiree that knows JS and company in CS management).

 

[Lear70]

They're gonna need some gates, ya think?

No doubt.

 

[ultrarunner]

Problem is the gates are going to be full of Midex Contract RJ's. It's a space issue.

IMO, AAI can't expand in MKE unless they aquire MEH. If MKE was ripe for expansion, etc..AAI would move in anyway. Prob is they MKE doesn't have the gate space.

 

[Eagle757shark]

They're gonna need some gates, ya think?

Yes they will need gates. I was responding to gt1900 who said that AirTran may move into MKE if the merger fades away. I personally think by the end of the week a new offer may be presented. The deadline would still be for the 8th of March. If the merger does go away, AirTran will definitely have to start a midwest hub somewhere. It may be St Louis, Indianapolis, or maybe Kansas City. Another possible spot San Antonio. MKE is probable managements first choice, but they may be forced to play another hand in the next month or so. Trying to force Midwest into submission by flooding the MKE market may weaken AirTran too. Not something I'd want to see.

 

[fam62c]

AirTran 3 year upgrade to Captain.

I'm just wondering how AirTran has a 3 year upgrade to Captain. According to what I can find they have 127 planes and about 1500 pilots. That comes out to about 12 pilots per airplane. Assuming half of the pilots are CA's thats about 750 CA's and about 750 FO's. This ratio may be more weighted towards CA's because of instructors, management guys etc. so let's say 800 CA's and 700 FO's. 60 new 737's at 6 CA's per airplane is 360 new CA positions; but there are now 700 FO's on the property. Is there a lot of attrition or something else that is driving the upgrades? I don't see how pilots hired now will have a 3 or even a 5 year upgrade. I would say that without a lot of attrition/retirements or additional deliveries beyond the 60 737's that a new hire will never upgrade. I must be missing something here because I know of guys who have gone over there in the last few years and have upgraded very quickly.......is that still the case or will upgrades slow down substantially?

 

[ultrarunner]

You're not out of wack Fam. What you're seeing when folks post "...i'll enjoy my 3 year upgrade..." or whatever drivel, is what HAS been happening.

You are correct in your analysis. When the deliveries stop or slow, upgrades will be strictly tied to retirements and attrition.

Airtran will likely only grow to a point, due to competition. That's a given. So you are spot-on in that if AAI only grows to 200 airframes or so, the bottom 300 to 400 pilots on property will be FO's for quite a long time.

AAI FO pay reaches its max at 8 years. And that rate, based on guarantee, annual pay equates to 66K a year.

 

[Lear70]

Oh boy, here we go again. Let me clear it up for you.

You're not out of wack Fam. What you're seeing when folks post "...i'll enjoy my 3 year upgrade..." or whatever drivel, is what HAS been happening.

Actually, what HAS been happening is 2 and 2 1/2 year upgrades. The last upgrade vacancy final had four 2 1/2 year guys in it.

Upgrades will stay between the 2 1/2 year mark and creep upwards to the 3 year mark by this time next year and stay around the 3 year mark until mid-summer '08, when they'll start creeping upwards again.

By the summer of '09, we'll be in 3 1/2 year territory, and creep towards a 4 year upgrade about this time in 2010. By summer of 2010 we'll be at a 4 1/2 year upgrade and up to 5 years by the end of 2010.

Guys hired on in the first half of 2006 will enjoy a 3 - 3 1/2 year upgrade. Guys hired on in the last half of 2006 will be around 4 years. Guys hired in the first half of '07 closer to 4 1/2 - 5 years.

Simple math, work it out.

You are correct in your analysis. When the deliveries stop or slow, upgrades will be strictly tied to retirements and attrition.

And when does THAT happen? Oh yeah, not for SEVERAL MORE YEARS.

Airtran will likely only grow to a point, due to competition. That's a given. So you are spot-on in that if AAI only grows to 200 airframes or so, the bottom 300 to 400 pilots on property will be FO's for quite a long time.

Tell that to Southwest. They certainly only grew "to a point, due to competition", didn't they?

Here's a news flash: management's already talking about another aircraft order with deliveries for 2010 and later. They know their bonuses don't go up without more business so their job is to keep growing the airline.

Don't give up your day job for airline market analysis.

AAI FO pay reaches its max at 8 years. And that rate, based on guarantee, annual pay equates to 66K a year.

Sure, if all you fly is guarantee. The LVI here has historically been 80-85 hours for YEARS.

So try closer to $71,000 and that doesn't include the increase we'll get with the new contract which will probably be out late this year or early next year (you can probably add at least 10-15% on top of that just for COLA).

Stick with the facts, IF you know them.

If you don't know them and don't work here, then why bother posting useless drivel about internal workings you have no clue of?

Fam, to answer your question directly, a guy in my seniority range has about a 3-3 1/2 year upgrade. A new-hire right now is looking closer to 5 years.

We're losing about 10 a month to attrition, combined retirements and people who leave for other carriers. 3 to 4 of those are CA's, at least for the last 6 months - it's picked up quite a bit. Will probably lose even more with the UAir, TWA/AA, and UAL recalls once they get lower on the list and those guys can recall directly into a hard line.

With that kind of attrition rate, you can up that upgrade by around 50 a year plus 50 senior F/O's leaving, or 360 for new aircraft + 400 in attrition for a total of 700+ CA upgrades by the end of the delivery schedule.

Hope that helps clear up the confusion.