the turtle
GO TERPS!
- Joined
- Jan 12, 2003
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More questions than answers....
Me thinks this articile is slanted by author's opinion...
Thursday, December 11, 2003 10:22AM EST
Mesa dives in, buys Midway assets
Wexford Capital, which had expected to get Midway's assets, chose not to raise its bid
By DUDLEY PRICE, Staff Writer
RALEIGH -- A surprise last-minute bid Wednesday allowed Mesa Air Group, one of the nation's largest regional airlines, to win the assets of Midway Airlines in a bankruptcy court auction.
Mesa expects to hire some former Midway workers and could begin flying out of Raleigh-Durham International Airport as soon as January. But Mesa President Michael Lotz said after the hearing that no decisions had been made.
Connecticut-based Wexford Capital, which bailed out Midway with a loan two years ago, bid $8.6 million last month for Midway's operating certificate and eight regional jetliners.
But Wednesday, Phoenix-based Mesa, a publicly traded company, topped the offer with a $9.15 million bid. After nearly an hour of deliberation, Wexford's representatives decided not to offer more.
A. Thomas Small, the federal bankruptcy judge, approved the sale to Mesa. He denied an objection from Midway's pilots union, which argued their existing labor contracts should be included.
Wexford had offered to rehire as many former Midway employees as possible and to keep Midway's former headquarters and a warehouse in Morrisville. Wexford planned to operate the airline as a feeder carrier for US Airways, as Midway, once the Triangle's busiest airline, did before it was ordered liquidated on Oct. 30.
Wexford also offered Robert Ferguson, the former Midway president and CEO, the same job titles at the new airline, which it planned to name Ascent Airlines.
Mesa will also assume the 20-month lease on Midway's former offices and has agreed to hire as many former Midway managers, pilots, flight attendants and ramp workers as possible.
"It would make great economic sense to do that because they are trained on the aircraft," Mesa consultant Edward Wegel testified Wednesday. The purchase involves assets that can quickly be turned into an operating airline, Wegel said. He said the company probably would have feeder flights out of RDU for an unidentified major carrier.
But Mesa's Lotz said in a telephone interview from Phoenix after the hearing that no decision had been made about keeping the headquarters in Morrisville, restarting flights or hiring Ferguson.
Lotz said the main attraction of the assets were Midway's regional jets, which are increasingly being used by airlines because declining demand makes it difficult to fill large jetliners. But airlines are having trouble financing regional jet acquisitions because of industry turmoil. Midway's planes already have financing.
As part of the purchase, Mesa will assume about $90 million in debt on the airlines.
"We're one of the larger operators of regional jets, so we have a need for regional jets," Lotz said.
Mesa now has 99 regional jets and 55 turboprop commuter planes, he said. The company runs commuter flights for United Airlines, America West and US Airways and under its own name.
Midway's former pilots, which are represented by the Washington-based Air Line Pilots Association, lost their effort Wednesday to block a sale unless their labor contract was picked up by the buyer. But some pilots said they might still get a favorable contract if they go to work for Mesa.
Midway's labor contract sets work rules, salaries and specifies that pilots must be rehired according to seniority. Mesa won't pick up the old contract, but Mesa's pilots are already represented by ALPA.
"We're cautiously optimistic the two ALPA groups can work together," said Mark Stewart, a former Midway pilot who leads the union chapter.
Staff writer Dudley Price can be reached at 829-4525 or [email protected].
The Associated Press contributed to this report.
Me thinks this articile is slanted by author's opinion...
Thursday, December 11, 2003 10:22AM EST
Mesa dives in, buys Midway assets
Wexford Capital, which had expected to get Midway's assets, chose not to raise its bid
By DUDLEY PRICE, Staff Writer
RALEIGH -- A surprise last-minute bid Wednesday allowed Mesa Air Group, one of the nation's largest regional airlines, to win the assets of Midway Airlines in a bankruptcy court auction.
Mesa expects to hire some former Midway workers and could begin flying out of Raleigh-Durham International Airport as soon as January. But Mesa President Michael Lotz said after the hearing that no decisions had been made.
Connecticut-based Wexford Capital, which bailed out Midway with a loan two years ago, bid $8.6 million last month for Midway's operating certificate and eight regional jetliners.
But Wednesday, Phoenix-based Mesa, a publicly traded company, topped the offer with a $9.15 million bid. After nearly an hour of deliberation, Wexford's representatives decided not to offer more.
A. Thomas Small, the federal bankruptcy judge, approved the sale to Mesa. He denied an objection from Midway's pilots union, which argued their existing labor contracts should be included.
Wexford had offered to rehire as many former Midway employees as possible and to keep Midway's former headquarters and a warehouse in Morrisville. Wexford planned to operate the airline as a feeder carrier for US Airways, as Midway, once the Triangle's busiest airline, did before it was ordered liquidated on Oct. 30.
Wexford also offered Robert Ferguson, the former Midway president and CEO, the same job titles at the new airline, which it planned to name Ascent Airlines.
Mesa will also assume the 20-month lease on Midway's former offices and has agreed to hire as many former Midway managers, pilots, flight attendants and ramp workers as possible.
"It would make great economic sense to do that because they are trained on the aircraft," Mesa consultant Edward Wegel testified Wednesday. The purchase involves assets that can quickly be turned into an operating airline, Wegel said. He said the company probably would have feeder flights out of RDU for an unidentified major carrier.
But Mesa's Lotz said in a telephone interview from Phoenix after the hearing that no decision had been made about keeping the headquarters in Morrisville, restarting flights or hiring Ferguson.
Lotz said the main attraction of the assets were Midway's regional jets, which are increasingly being used by airlines because declining demand makes it difficult to fill large jetliners. But airlines are having trouble financing regional jet acquisitions because of industry turmoil. Midway's planes already have financing.
As part of the purchase, Mesa will assume about $90 million in debt on the airlines.
"We're one of the larger operators of regional jets, so we have a need for regional jets," Lotz said.
Mesa now has 99 regional jets and 55 turboprop commuter planes, he said. The company runs commuter flights for United Airlines, America West and US Airways and under its own name.
Midway's former pilots, which are represented by the Washington-based Air Line Pilots Association, lost their effort Wednesday to block a sale unless their labor contract was picked up by the buyer. But some pilots said they might still get a favorable contract if they go to work for Mesa.
Midway's labor contract sets work rules, salaries and specifies that pilots must be rehired according to seniority. Mesa won't pick up the old contract, but Mesa's pilots are already represented by ALPA.
"We're cautiously optimistic the two ALPA groups can work together," said Mark Stewart, a former Midway pilot who leads the union chapter.
Staff writer Dudley Price can be reached at 829-4525 or [email protected].
The Associated Press contributed to this report.
