Airtran Sec Filing

[FlyWolf]

bizjournals.com

AirTran: Midwest merger would add 1,100 state jobs, $1B to local economy
Monday February 26, 6:36 pm ET

AirTran Holdings Inc. said a merger with Midwest Air Group Inc. would add 1,100 jobs in Wisconsin and create nearly $1 billion in economic benefit for the state following its planned expansion of service.

The Orlando, Fla.-based airline unveiled details of its post-merger expansion in a filing Monday with the U.S. Securities and Exchange Commission. AirTran is seeking a $345 million unsolicited buyout of Midwest, which has rejected its offer.

AirTran said it expects to add 74 more daily departures and 29 new destinations under its expansion plans following a merger, according to documents. It expects to add 50 new jet departures per day at General Mitchell International Airport in Milwaukee by summer 2009, resulting in a 50 percent increase to 215 daily flights.

AirTran listed 29 new cities that it would fly to out of Milwaukee that Oak Creek-based Midwest Airlines doesn't currently serve nonstop. Some of those cities, which Midwest flies to or will fly to through its Kansas City, Mo., hub, are Seattle, Vancouver, San Francisco, Houston, San Antonio and Cancun, Mexico.

Seating capacity is expected to more than double, with the expansion achieved through the added service, additional destinations and conversion to a fleet of 128 Boeing 717s. Midwest now uses a combination of Boeing 717s and other aircraft with smaller seating capacities.

AirTran said a merged airline would maintain training facilities, a call center, aircraft maintenance, and a marketing services center in the Milwaukee area. The 1,100 employees that would be added would boost payroll by more than $30 million.

Mitchell International would also benefit from $11 million more in annual airport fees, and more than $10 million more in passenger facility fees a year.
The state would also benefit from more than 3.7 million new visitors and non-airport spending of $460 million per year, AirTran claims.

AirTran (NYSE: AAI - News) has been trying to convince the shareholders of Midwest Air Group (AMEX: MEH - News) to tender their shares under an exchange offer AirTran commenced in January. Midwest is telling shareholders to reject the offer, saying that it is inadequate and does not take into account the value of the company's own strategic plan for growth.
Published February 26, 2007 by The Business Journal</I>

 

[FlyWolf]

Seating capacity is expected to more than double, with the expansion achieved through the added service, additional destinations and conversion to a fleet of 128 Boeing 717s. Midwest now uses a combination of Boeing 717s and other aircraft with smaller seating capacities.

Airtran has 87, and Midwest has 25 B-717, thats 112 B-717, does that means Airtran is going to aquire 16 extra 717?

 

[CrewDog97]

Leonard wants more 717s

Yeah, I recently heard Joe Leonard in person say that if AirTran acquires Midwest, he's going to look to acquire every 717 he can get his hands on. Don't know where they're going to come from though...

 

[FlyWolf]

I personally think that this deal is far from over, I think aai is busy with the contract negotiations, as soon as they settle the contract we will see Airtran trying much harder to get the deal done, I won't be surprised to see the contract done before the Midex annual meeting around April or so.

Airtran guys keep us informed if you hear anything from JL or any of his boys.

 

[FlyWolf]

Yeah, I recently heard Joe Leonard in person say that if AirTran acquires Midwest, he's going to look to acquire every 717 he can get his hands on. Don't know where they're going to come from though...

It makes sense since Airtran knows from experience that the 717 cost the same to operate as any RJ out there.

Crewdog, I think there are few 717 becoming available soon from foreign airlines.

 

[Nindiri]

I wonder why they didn't just keep the 717 assembly line going a little longer.

 

[FlyWolf]

I wonder why they didn't just keep the 717 assembly line going a little longer.

Boeing doesn't want to deal with the 717, plus Midwest didn't want to firm the 25 option since we needed something with longer range, even though it will be sad I don't think we will see the 717 fly past the next 5 years at least here in the US. Boeing doesn't want to be bothered by the 717 support.

 

[Nindiri]

I figured something like that. It's a shame really. I hear it's a nice airplane to fly, and almost bid it instead of the 737.

 

[j41driver]

There are 8 days of contract mediations scheduled for March. We'll see where that gets us.

 

[Lear70]

I figured something like that. It's a shame really. I hear it's a nice airplane to fly, and almost bid it instead of the 737.

I'll trade ya'.

Guys in our class on the 737 were holding a line straight out of class. *sigh*

 

[Nindiri]

Yeah, that was the deciding factor for me. I've sat enough reserve in the last few years to hold me for awhile.

 

[Lear70]

Me, too. 3 years on reserve at PCL, most days were 9 hours of ready reserve at the airport.

Like I said, this place is great in comparison...

 

[FlyWolf]

Just watched the news, Airtran was in Milwaukee today trying to convince the shareholders to tender.

 

[Citrus531]

Boeing doesn't want to deal with the 717, plus Midwest didn't want to firm the 25 option since we needed something with longer range, even though it will be sad I don't think we will see the 717 fly past the next 5 years at least here in the US. Boeing doesn't want to be bothered by the 717 support.

I think we'll be like Delta is with the MD-88's/90's...nobody wants the 717's and with us being basically the only carrier to fly them we might get decent deals as those leases come up for renewal. Although I heard they're like 18 year leases and the oldest 717 is 8.

I know support is tough but with most if not all of the 156 made still in service, where would 112+ airframes go assuming the midwest deal goes through? I doubt they'd just start scrapping them all...kinda like the CRJ's..not really a good second hand market for the 717...tons of CRJ's on the market in the next several years but who wants them....so little of the 717's made and again, who would want them...maybe a start up?!?

 

[TV9Driver]

i guess the main concern is that there are no more engines for the 717. Parts will only get more expensive on an out of production engine.

 

[BSkin]

I'd give the 717 ten+ years, especially if the merger/takover goes through. Too many good planes to sell, opt out on, etc. Support (ie., parts) will most likely remain available. Hope so!

 

[Citrus531]

Do you guys(FL pilots) talk to the mx guys a lot regarding that and other issues on the airplanes? I do every once in a while and they say the BR-715's have their issues at times....

One guy told me the 717's are good but have a lot of minor issues all the time but i guess an airplane averaging 7-8 cycles a day will have some stuff come up?!?

 

[Eagle757shark]

Crewdog, I think there are few 717 becoming available soon from foreign airlines.

JETSTAR airways a new low-fare operation launched by Qantas in May 2004 started replacing its 717 fleet with A320s. I believe they had between 12 and 15 717 aircraft. Those aircraft are currently looking for a new home. That may be the source of the additional 717s in the future. As far as the 717s going away because Boeing stopped making them, MD80s are being operated by American, Delta, Alaska, Midwest and Northwest operates old DC-9s. My point is many US carriers are flying large fleets of aircraft that are no longer in production. The 717 is a fairly new aircraft. Will definitely see around 15 more years in operation. That said, great airplane to fly.

 

[FlyWolf]

I agree Eagle, the 717 is a great airplane to fly and also to upgrade on since its so pilot friendly, just don't understand how we used to fly the 9, lol, so spoiled now.