Is Midwest Express a takeover target?

[shon7]

Was involved in a very interesting conversation today where someone suggested that Midwest Express would be bought out within the next couple of years by a larger airline. They are doing well and would add earnings to the buyer instantly while also giving the buyer a niche market and a lot of business travellers.

Any comments? Anyone heard anything along the same lines or is it what it all eventually boils down to: speculation.

 

[1800 RVR]

Not likely...

I wouldn't bet the farm on that rumor. Several reasons why not:

1. Who would want to buy another airline right now? Too many costs involved, not enough reward right now. Just look at AA/TWA.

2. We are LOSING money, not making it. We made some in one of the quarters, but it was minimal. Last quarter we lost 8.3 million; this quater - who knows? I don't think it will be pretty.

3. Our niche isn't as strong as it once was. 9-11 has done a number on our "niche", the businessman, because they aren't travelling like they once were. Most can now do their work via teleconferencing, etc.

4. People are more price-conscious than ever before. Our wider seats and better food service compared to others just doesn't command the price premium it once did.

5. We only carry about 1% of the total passengers in America (I think that was the number I last heard), so there isn't much to gain in terms of market share.

6. We have old DC-9s and MD80s, but getting new 717s. Not alot of fleet commonality with other carriers. (except NWA and Airtran).

I'm sure ther are other reasons, but those are the big ones that I can think of. By the way, we've had those rumors floating around for a long time pre- 9-11. First, it was CAL, then NWA, back to CAL, etc. Just a big rumor mill...

 

[DH106]

1800RVR, are you furloughed from there? Just curious.

 

[Publishers]

1800

!600RVR states the case well.

There is no chance whatsoever that Midwest Express will be taken over by any major airline. That said, it is possible that they be bought by someone who also serves a nich market.

Someone could buy Pace and Midwest as example.

 

[1800 RVR]

DH106

I was for a period of time, but not any more. This is a good company, but it could be better. There is, however, alot of work that needs to be done. It is time we reinvent ourselves to fit our product to today's environment.

 

[DH106]

1800RVR, you know that, and I know that, but I feel like we're alone in our thinking. I mean, when is the company actually going to take steps toward that? Isn't the clock ticking? What's the business plan? Does anybody know? Sorry... just frustration talking, here.