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Many Midwest flights aren't Midwest at all

GOULET!

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Many Midwest flights aren't Midwest at all

Increasingly, Republic Airways and its crews fill the schedule

There's a growing chance that the next Midwest Airlines flight you take will actually be on a jet owned and operated by Indianapolis-based Republic Airways Holdings Inc.
Republic already is flying more than a dozen commuter jets for Midwest under a contract that started last fall. Two more are coming in August, when Midwest will restore nonstop flights to Los Angeles using Republic jets and crews. And later this year, Republic will take over some shorter routes that Midwest now outsources to SkyWest Inc.
If Midwest eventually replaces the last nine Boeing 717s in its own fleet with Republic jets, as Midwest's unions fear may happen this fall, Midwest could become what industry analyst Helane Becker calls the nation's first "virtual airline."
The Midwest brand name would survive. Also, Midwest - which turns 25 years old this month - presumably would continue to have ground employees at Mitchell International Airport and other airports, and would continue operating its Oak Creek reservations center. But the flight crews and aircraft maintenance employees would be from Republic.
It's possible that the Boeing 717s used by Midwest will be turned over to a Mexican airline. Boeing Capital Corp. has agreed to lease 25 Boeing 717s to Mexicana Group. In recent years, Midwest's main fleet consisted of 25 Boeing 717s, but it returned 16 jets to Boeing in September to cut costs.
The September return gave Boeing Capital options to require Midwest to return the remaining nine 717 aircraft with varying notice periods, according to Securities and Exchange Commission filings.
"They're definitely going away," said Bryan Jandorf, spokesman for the Midwest chapter of the Air Line Pilots Association. "It's just a matter of when."
Republic pilots earn about 30% to 50% less than their Midwest counterparts, Jandorf said.
"That's what this is all about," said industry consultant Vaughn Cordle, who operates Airline Forecasts LLC in Arlington, Va.
Midwest spokesman Michael Brophy declined to comment on the airline's future. Brophy has said Midwest plans to continue to operate the Boeing 717s for now, while considering its options for other aircraft.
Midwest also says it would offer its union flight crews positions on the Republic jets, but only if the unions take major pay concessions that Midwest says are needed for the airline to be competitive. The unions have opposed those pay cuts, which they say would gut their labor contracts.
$25 million loan

Republic's role at Midwest, which has 1,640 employees, has been growing since last fall, when Republic lent financially troubled Midwest $25 million.
That loan, which helped Midwest avoid Chapter 11 bankruptcy, comes due in September, according to Republic's annual report. It was tied to the first Midwest-Republic contract, with Embraer 170 jets replacing 16 Boeing 717s, leading to a layoff of 240 Midwest employees.
With last week's expanded contract, Republic lent an additional $6 million to Midwest. It was later disclosed that Midwest will pay SkyWest $4 million to get out of its contract with SkyWest. That payment is guaranteed by Republic.
Also, Republic recently intervened in a federal lawsuit filed against Midwest by Wells Fargo Bank and Polaris Holding Co. The suit said Midwest had fallen behind on jet and jet engine lease payments. Midwest later acknowledged that it owed $4.2 million.
On May 5, a judge ordered Midwest to pay that amount to Wells Fargo and Polaris. But on May 18, that judgment was changed to say that the money was instead owed by Midwest to Republic.
Midwest accounted for about 5% of Republic's regional airline services revenue prior to the recent contract expansions. Republic in 2008 reported total revenue of $1.48 billion and posted net income of $84.6 million. It flies regional routes for larger carriers, such as United Express for United Airlines Inc.
Republic's revenue and profits have grown steadily since it became a publicly traded company in 2004. Its largest customers for flying regional routes include Delta Air Lines Inc., US Airways Inc., United Airlines, Continental Airlines Inc. and American Airlines Inc. Republic carries a lower cost structure than those larger airlines in part because Republic's pilots earn less money, and because Republic isn't burdened with a heavy pension liability, Cordle said.
"They're a little bit more efficient than everybody else," Cordle said.
Small, but growing

While Midwest is one of Republic's smallest contracts, it is a growing piece of Republic's business with the recent expansions. Also, it could bring more revenue if Midwest drops its nine remaining Boeing 717 jets.
Republic spokesman Carlo Bertolini said Midwest is a valued customer with a viable business plan.
But Jandorf, of the Air Line Pilots Association, and Toni Higgins, president of the Midwest chapter of the Association of Flight Attendants, say Midwest's managers have refused to provide details about the company's future. Together, their unions represent around 230 Midwest employees.
Jandorf said the pilots association wants to negotiate a contract so that Midwest employees would fly the Republic jets. But Midwest's union pilots are being asked to take pay and benefits cuts of 40% to 60%, even as management refuses to say what planes or routes those pilots will fly.
"It's ludicrous," Jandorf said.
Midwest has faced questions about its future after record fuel price spikes and a deepening recession devastated the U.S. airline industry in 2008, causing a collective loss of $23.5 billion. Midwest cut service by 40%, among the deepest cuts by a U.S. carrier, and eliminated more than 1,200 jobs.
Midwest reported a loss of $477 million in 2008, according to Department of Transportation reports. Most of that was due to an accounting adjustment and not Midwest's operations, Brophy said last month.
Midwest began regularly scheduled jet service in June 1984. It built a reputation for excellent customer service and was focused mainly on business travelers.
But that strategy ran into trouble in the aftermath of the 2001 recession, with passengers increasingly seeking lower fares.
Midwest in 2007 fended off a hostile takeover attempt by AirTran Holdings Inc., leading to its sale in January 2008 to TPG Capital and Northwest Airlines Corp.
Fort Worth-based TPG Capital, which owns a 53% stake in Midwest, has reportedly written down by about 90% its $239 million investment in Midwest. Northwest last year wrote off its $213 million investment before Northwest was acquired by Delta Air Lines, which now holds a 47% stake in Midwest.
 

aa73

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If the Republic pilots' union had any balls at all, they would stage some kind of work action against this.
 

Scapegoat

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It will be intersting to see what Republic's play is in this. If its to get the operating certificate then im sure UAL will no longer want them (as UAX) if they are competeing with them so close to ORD, (unless they take it to IND and try to use it there or sell it i suppose).

MKE will likely be a 3 horse town in 12 to 18 months with Delta, Airtran and SWA. I doubt that Midwest will be able to operate that long even with reduced fees paid to RAH. Plus their customer base will be syphoned off by DAL which has a code share agreement with them.

The Midwest pilots missed their chance with Airtran (hindsight, i know), and should have walked out when RAH came to MKE last fall. Now, there is nothing to do but watch it all unfold while management reaps what's left.
 

GOULET!

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Niether Republic's or Midwest's pilot group has any balls so this slow death continues.
 

godsgift2aviatn

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If the Republic pilots' union had any balls at all, they would stage some kind of work action against this.
Yeah, for our company throwing good money after bad. Midwest should have gone out of business months ago.
 

dougdrvr

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Replace Republic with Midwest, and you are spot on.
All the Midwest pilots would have to do is agree to the draconian cuts that management wants for a contract equal to Republic (which is basically no contract) and they would be flying the E jets and would probably start recalling pilots. Even the furloughed guys arre saying "screw that" so you Repubic pukes go ahead and enjoy slicing your own throat 'cause that's what you're doing.
 

jkurtfly

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The majority of the Midwest pilots wanted the airtran deal. It was selfish T.H. that said no to the deal becasue he would have lost his job. The airtran deal would have been alot better for MKE as a whole.
 

Captain Morgan

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MKE to LAX on an RJ? Ugggggghhhh....

RJ!!?? The 190 is not an RJ! It is a mainline aircraft and as such should be operated by one. Let's get that "RJ" stigma disassociated with the 190. It is equal to a DC-9 no less. I know that our union was not informed of any of these plans and was blindsided by the announcements. Airtran tried a hostile take over and that didn't work, so Republic is just taking it over slowly and less hostile.
 

flylike44

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All the Midwest pilots would have to do is agree to the draconian cuts that management wants for a contract equal to Republic (which is basically no contract) and they would be flying the E jets and would probably start recalling pilots. Even the furloughed guys arre saying "screw that" so you Repubic pukes go ahead and enjoy slicing your own throat 'cause that's what you're doing.

wrong. even if the yx guys agreed to the cuts, there's only one way they'd be flying those 170's. midwest would have to aquire them. i'm fairly certain midwest doesn't have the financial wherewithal to start picking up the tab for airplanes.
 

flylike44

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If the Republic pilots' union had any balls at all, they would stage some kind of work action against this.

if you had any common sense you'd know that neither the republic group nor the midwest group can legally take any kind of work action.
 

dougdrvr

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wrong. even if the yx guys agreed to the cuts, there's only one way they'd be flying those 170's. midwest would have to aquire them. i'm fairly certain midwest doesn't have the financial wherewithal to start picking up the tab for airplanes.

Sure they do, they're borrowing the money from you. a$$face.
 

Tarzan

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A DC-9 overhead can hold my roller bag lengthwise. An ERJ-190 cannot.

DC-9 was designed as a plane that the RJ's fill today. All the DC-9 is, is an an RJ that pokes a bigger hole in the air and burns butt load more gas.
 

Browntothebone

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If the Republic pilots' union had any balls at all, they would stage some kind of work action against this.

Why? This is good news for RAH pilots. New upgrade opurtunities and that much quicker to 1000 turbine PIC and the majors when they hire again. ERJ 190 time will look great on a resume to a major. They will know that an ERJ190 pilot can fly mainline style equipment.
 

mynameisjim

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Like shooting fish in a bucket. :rolleyes:

I've ridden on one. It's a long RJ. More comfortable than Canadair's product, but still an RJ.

A DC-9 overhead can hold my roller bag lengthwise. An ERJ-190 cannot.


Only on the side with 3 seats, so it's half RJ?
 

flylike44

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Sure they do, they're borrowing the money from you. a$$face.

you obviously aren't aware of the going rate for one of those birds, let alone upwards of 12 of them. to humor you, since you're obviously a cretin of the lowest order, i'll give you a hint. it's more money than what we've given them to date or could give them in the near future.
 
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