Midwest attacks Airtran

[meanstreak]

Ouch!!!!

http://biz.yahoo.com/prnews/070228/nyw054.html?.v=77

 

[MD80DRVR]

Ouch!!!!

http://biz.yahoo.com/prnews/070228/nyw054.html?.v=77

That was pretty harsh!

 

[400ADude]

Spot on.

 

[FlyWolf]

Really didn't think our management had claws , March 8th. is right around the corner and airTran will have to disclose how many shares have been tendered.

 

[ACL65PILOT]

I am glad to see them go after Airtran. It would be a shame for one of the few good airlines to be lost.

 

[maxblast72]

"To further compound the problem, AirTran has committed to purchasing an
additional 60 planes with no clearly articulated strategic plan to
deploy and utilize these planes on a profitable basis."


I am not a business major so maybe someone can explain this to me. How is having 60 airplanes bought in 2003 somewhere in the mid 30 millions range a bad thing when the airplanes are now going for 5 to 10 million more in the world market (and maybe more with Southwest driving the demand up). I believe we have already sold 2 to a Nigerian airline for a decent profit.

Having the ability to grow if the markets are there or having to the ability to sell planes for a profit seems like a good spot to be in to me.

 

[General Lee]

Well, Airtran is getting a bunch of planes and so far haven't given anyone a clue on what the plan to do with them, or where they plan to put them. ATL is maxed out, with no new terminal in sight for awhile. I guess a good place to put them would be Millwakee and replacing Midwest's older MD80s.

Bye Bye--General Lee

 

[maxblast72]

Actually, Atlanta isn't maxed out yet. Per Bob Fornaro on the last earning conference call, we were operating 240 departures a day out of Atlanta but had the gate footprint to do up to 300 departures a day since the spent the effort putting extra flights into the use em or lose em D gates that opened up last fall. That means a 25% growth of Atlanta possible during 2007 (I guess that is how we can start Newburgh, Phoenix, San Diego, St. Louis, and Charleston all to ATL).

 

[AFcitrus]

WOW! Those are some pretty scathing acusations being thrown by Midwest. However, I had to laugh on most of them. It's funny how you can make statistics say anything you want as long as you spin them your way. For Example - AAI has lost money 3 of the last 4 quarters while Midwest hasn't. This failed to mention AAI has made increasing profits for the past 8 years while Midwest has lost money the last 5 years (with the possible exception of this past year). Here's another doosy - Midwest loads increasing while AAI's decreasing. Fails to mention that this a normal initial occurence when a company adds capacity and grows a market. Meanwhile a stagnant company adds nothing in over 5 years, their loads will grow - but for how long.

It's interesting that AAI has had nothing but good things to say about Midwest through this effort. With the exception of comments about the Midwest board who are more interested in pulling the wool over their shareholders eyes with some warped RJ expansion program so they can keep there cushy "cash cow" jobs. And then a week before the deadline, Midwest comes out bashing AAI. Classy, Real classy.

I've found in life that usually when a company/individual goes on the defensive it is because they have run out of intelligent ideas and are getting desperate. It will be interesting to see how many shares have been tendered but you can bet Midwest management knows that number and based on this unprofessional bashing I'm guessing that number is signifigantly higher than most people think.

Incidentally, the views/opinions expressed by Midwest in this story are completely out of line with what industry experts believe. Who would you believe more - objective industry experts or the beseiged leadership of an airline whose shareholders may be starting to see the light.

I wish the best for all Midwest and AAI employees but quite frankly I'd rather this aquisition not go through. Let's see how big Timmy boy talks when AAI and NWA come rolling through MKE profitably charging half of what Midwest needs to charge to make a profit. Let the capitalism roll!!!

 

[metroplex]

NWA and Citrus tried that before. Did not work, because their product sucks.Airtran employees have even indicated that things are slowing down.Any reason for the attrition at Airtran.....maybe pilots see the writing on the wall.

 

[General Lee]

Actually, Atlanta isn't maxed out yet. Per Bob Fornaro on the last earning conference call, we were operating 240 departures a day out of Atlanta but had the gate footprint to do up to 300 departures a day since the spent the effort putting extra flights into the use em or lose em D gates that opened up last fall. That means a 25% growth of Atlanta possible during 2007 (I guess that is how we can start Newburgh, Phoenix, San Diego, St. Louis, and Charleston all to ATL).

You forgot Potland,ME too. All of those combined give you an extra 12-15 flights. Still, where will you put all of those shiny new 73Gs? That was my point.

Bye Bye--General Lee

 

[AFcitrus]

NWA and Citrus tried that before. Did not work, because their product sucks.Airtran employees have even indicated that things are slowing down.Any reason for the attrition at Airtran.....maybe pilots see the writing on the wall.

MKE is one of our best markets. The good people of MKE know AAI doesn't suck or else we wouldn't be taking so much money from you.

What AAI employees have you been talking to. Slowing down is a relative term. We are slowing down from 24% annual growth to 19% annual growth. See what I mean about statistics. You generalize that a 5% slow in annual growth means trouble for the company.

Look back 20 years, I think you'll see another company's growth trend looked a lot like ours. That company is SWA. I'll take that kind of growth over the Midwest stagnation any day.

 

[737 Pylt]

MKE is one of our best markets. The good people of MKE know AAI doesn't suck or else we wouldn't be taking so much money from you.

What AAI employees have you been talking to. Slowing down is a relative term. We are slowing down from 24% annual growth to 19% annual growth. See what I mean about statistics. You generalize that a 5% slow in annual growth means trouble for the company.

Look back 20 years, I think you'll see another company's growth trend looked a lot like ours. That company is SWA. I'll take that kind of growth over the Midwest stagnation any day.

All good points AFcitrus. Lets hope this thing goes through sooner rather than later.
Midwest has a shabby product at best! The stagnation of this dink airline is coming through, and without Air Tran, they might as well start burning the furniture to keep the place warm!

737

 

[BILL LUMBERG]

MKE is one of our best markets. The good people of MKE know AAI doesn't suck or else we wouldn't be taking so much money from you.

What AAI employees have you been talking to. Slowing down is a relative term. We are slowing down from 24% annual growth to 19% annual growth. See what I mean about statistics. You generalize that a 5% slow in annual growth means trouble for the company.

Look back 20 years, I think you'll see another company's growth trend looked a lot like ours. That company is SWA. I'll take that kind of growth over the Midwest stagnation any day.

Sure you have growth......with a 68 percent LF......and your profits aren't earth-shattering.....when the downturn happens, where will you stand then??

Comparing yourselves to SWA, is at best, a long shot. AAI wants to beat skulls with DL, while SWA went around the hub and spoke carrriers to where they are today......profitable using one airplane type.....

Is MKE going to pay AAI some incentive like every other airport seems to do?? Save the growth, I just want my airline to get the same sweet deals!!

 

[ultrarunner]

"To further compound the problem, AirTran has committed to purchasing an
additional 60 planes with no clearly articulated strategic plan to
deploy and utilize these planes on a profitable basis."

I wonder if TH realized how stupid that sounded after he read it. I mean c'mon..like he's up to speed on AAI's "strategic plan".

Hey, someone better tell SWA and any other airline to clear their strategic plans with TH...'cause ya know, if you don't "clearly articulate" what you're going to do...blah blah blah.


geezzz...give me a break.

I would think TH and his spin-doctors have much bigger fish to fry than spewing out this type of dribble. Other than losers like me hanging out on FI, who really gives a rats a$$ how many freaking MKE civic and business leaders and shareholders you've met with. You either have the support of the shareholder majority or you don't. Simple as that.

And you'll know in a week. Give it a rest.

 

[Citrusflyer]

Sure you have growth......with a 68 percent LF......and your profits aren't earth-shattering.....when the downturn happens, where will you stand then??

A little bit of research beyond the numbers would tell you that the drop in load factor had a lot to do with the fact that we had a "use it or loose it" deal with several gates in Conourse D. In order to do that we sacrificed load factor (in the short term) and profits (also in the short term) for ATL gate space in the long term. Not a bad business decision IMO. As for a "downturn" we did quite well from 2001 to now, I shutter to think any new downturn will be as bad. So don't loose any sleep over that one.

Comparing yourselves to SWA, is at best, a long shot. AAI wants to beat skulls with DL, while SWA went around the hub and spoke carrriers to where they are today......profitable using one airplane type.....

SWA did what it had to do to make their business plan not only survive but to thrive. The environment is much different today...No one could come in with a bunch of 737-200's and make a go of it...right? FL is doing what it needs to do to thrive as well. We're not even 15 years old as a company and we're close to 125 airplanes and an operation in ATL that is just smaller than the size of AA's ORD operation. Not too bad if you ask me. I don't think that we are the size or caliber of SWA as it stands now, but how about where SWA was at the same age?

 

[Lear70]

Well, Airtran is getting a bunch of planes and so far haven't given anyone a clue on what the plan to do with them, or where they plan to put them.

Would YOU share your business strategic plan with your competitors?

Thought not.

NWA and Citrus tried that before. Did not work, because their product sucks.

That's not entirely accurate, either.

NWA tried it with CRJ's just to try to "put the nail in the coffin" for Midwest.

The reason it didn't work is:

A.) They used RJ's which have always been operated as a loss to Northwest, not to mention suck when compared to the Midwest-configured 717's (or just about any other aircraft for that matter).
B.) RJ's are mainly used by Northwest to connect pax to high $$ international flights. In MKE, there's no Int'l service so all the Int'l pax were already going on NWA or heading into Chicago.

Long-term it was never a viable solution.

Airtran employees have even indicated that things are slowing down.

Ummm... SOURCE?

Any reason for the attrition at Airtran.....maybe pilots see the writing on the wall.

The attrition is to jobs that are 2-4 times the earning potential and better stability than here, such as SWA, FedEx, etc.

When people start leaving us to come to Midwest, THEN we'll have a problem.

The article in general was a HUGE propaganda piece filled with half-truths and some barely-veiled outright falsehoods.

 

[73-Driver]

deleted!!!!!!

 

[Citrus531]

A little bit of research beyond the numbers would tell you that the drop in load factor had a lot to do with the fact that we had a "use it or loose it" deal with several gates in Conourse D. In order to do that we sacrificed load factor (in the short term) and profits (also in the short term) for ATL gate space in the long term. Not a bad business decision IMO. As for a "downturn" we did quite well from 2001 to now, I shutter to think any new downturn will be as bad. So don't loose any sleep over that one.



SWA did what it had to do to make their business plan not only survive but to thrive. The environment is much different today...No one could come in with a bunch of 737-200's and make a go of it...right? FL is doing what it needs to do to thrive as well. We're not even 15 years old as a company and we're close to 125 airplanes and an operation in ATL that is just smaller than the size of AA's ORD operation. Not too bad if you ask me. I don't think that we are the size or caliber of SWA as it stands now, but how about where SWA was at the same age?

We were given a # of departures we HAVE to meet on D con each day...it has moved from 40 to 55 and now stands at 65-70 a day....TBI airport management then records these numbers along with the N number, A/C type and if it was a turn or not and turns it in to the airport....it corresponds exactly with what you were talking about...."use it or lose it"

The common use gates including the recent addition of D11A have Air Canada, Northwest, Continental, and now Comair and ASA have been using D1 and D1A on random slots during the day....normally right when we have a 737 on the ground and no gate available....TBI normally alerts us of this AFTER we have gone over our departure plans for the day on D con. I know Bob F. has said up to 300 out of ATL in the near future but speaking as someone who looks at the a/c plot each night...the gaps between dept banks are shrinking...something has to be done about the lack of 737 gates and I think it will....also with the gaps shrinking I think our "banks" of flights will go away and it'll just be constant...all flights, all the time...no breaks

 

[General Lee]

Would YOU share your business strategic plan with your competitors?

Thought not.

Wait, didn't you guys just share your plan with everyone? What about the plan you gave the SEC with regards to what you would do with Midwest airlines and the MKE hub? Remember that? You gave each route, like starting a 73G on MKE to Vancouver. I think you DID share your business strategic plan with your competitiors. Right? Thought SO. If it doesn't go well, you may have NO PLAN for those planes.


MONDAY, Feb. 26, 2007, 4:01 p.m.
By Tom Daykin and Avrum D. Lank</B>


AirTran details plans for Midwest to SEC

AirTran Holdings Inc. (AAI) has taken the unusual step of providing details on the number of new flights and jobs it would add in Milwaukee, if it completes a hostile takeover attempt of Midwest Air Group Inc. (MEH)

AirTran, in a filing with the Securities and Exchange Commission, said it would add 74 daily departures from Mitchell International Airport, while also more than doubling seating capacity and adding 29 new destinations. Midwest Air, which operates Midwest Airlines and Midwest Connect, offers around 140 daily departures from Mitchell International to just over 40 cities.

That increased business would create around 1,100 jobs based in Milwaukee, with an initial payroll of $30 million, said Kevin Healy, AirTran vice president of planning. Midwest Air has 1,865 airline jobs at Mitchell and the company's Oak Creek headquarters.

The economic impact plan presented by AirTran Holdings Inc. is "unrealistic and inconsistent with their previous filings," said Carol Skornicka, Midwest senior vice president.

The filing with the Securities and Exchange Commission envisions a combined airline continuing to use the smaller regional jets now flown by Midwest's regional carrier, something AirTran has said in the past was not economically wise, she said.

Scott Dickson, chief marketing officer for Midwest Air, said that the assumptions AirTran makes about building traffic to several new destinations are also unrealistic. He cited proposed service between Milwaukee's Mitchell International Airport and Rochester, N.Y., which AirTran says is part of its plan. "There are about 18 passengers per day traveling in that market," Dickson said. "They are proposing to have 234 seats available ... That doesn't sound very realistic."

But Healy said AirTran has "tremendous faith" in its ability to build a vibrant hub in Milwaukee and stimulate growth in the market. "Their thinking is holding back economic development here," he said of Midwest executives.

AirTran has said it would stimulate traffic by lowering fares and building connecting traffic through Milwaukee.

Healy and other AirTran executives have repeatedly said their Orlando, Fla.-based company would expand operations in Milwaukee if it acquires Midwest Air. Today's filing offers more information, including a list of new destinations and a breakdown on the types of jobs that would be created.

AirTran's SEC filing is designed to refute what Healy called "misinformation" provided by Midwest Air, whose executives have raised doubts about AirTran's plans for Milwaukee.

"We think we'll be better off if people understand what we're trying to accomplish," Healy said.

The filing is targeted to community leaders, some of whom have publicly sided with Midwest Air's plans to remain independent, Healy said.

AirTran also is trying to reach shareholders, who will ultimately decide whether the takeover bid is successful. AirTran's $13.25 a share tender offer to shareholders expires March 8, but that deadline could be extended. Healy said he wasn't sure if AirTran would have a majority of outstanding shares tendered by then.





Bye Bye---General Lee

 

[Lear70]

Wait, didn't you guys just share your plan with everyone? What about the plan you gave the SEC with regards to what you would do with Midwest airlines and the MKE hub? Remember that? You gave each route, like starting a 73G on MKE to Vancouver. I think you DID share your business strategic plan with your competitiors. Right? Thought SO. If it doesn't go well, you may have NO PLAN for those planes.

Oh come on now... you know the plan for ONE airport does not make a complete and comprehensive strategic plan.

The POINT I was making, which you avoided acknowledging, was the fact that it's bad business to give away your entire business plan, which is exactly what Midwest (and you) were knocking us for.

I still think we're holding a card or two we haven't shown yet.

 

[mnboyev]

Ahhh hey anybody seen our strategic plan lately??? Oh yea..um... fly the jets safely..stay on schedule...be as nice as you can to the customer !.....That be about it...Oh ..and have a little fun if you can... best wishes to all !!

 

[metroplex]

so, Lear 70, it is not competition if it is not in the same Aircraft type, ???come on, It does not matter what type of Aircraft it is that is competing against you, seats in the market are seats...
Lear70, I believe you work in the airline industry, you should know that senority is everything. Even if you can make a few $ more at another place, you do not just give up seniority, life style, good contract and stabilty, maybe move to a new domicile, unless your company is going down the drain and they are shutting the doors.But you seem to agree there is more stability at SWA or fedex vs. AAI. 2 years ago nobody would have considered AAI unstable, maybe it is a sign that things are not going to well.

 

[Britpilot]

2 years ago nobody would have considered AAI unstable, maybe it is a sign that things are not going to well.

Yep, the sky is falling.(sound of warning horn in background) All pilots at AAI look for another job immediatley.

 

[mnboyev]

Most would agree...boxes pay better...However.. I have paid a lot for box lately.......grin..smirk.. Birthday's..Xmas.. Spring Vacation...bla bla bla..

Nobody is running out the door...pleeeeez ...maybe real junior newhires that had iron's in the fire prior to AirTran .. ...who can blame em...good luck.. I just want to make it to 60..

 

[Ty Webb]

"The sky is falling! The sky is falling!"


Sheesh . . . .

 

[Wesb737fo]

Wait, didn't you guys just share your plan with everyone? What about the plan you gave the SEC with regards to what you would do with Midwest airlines and the MKE hub? Remember that? You gave each route, like starting a 73G on MKE to Vancouver. I think you DID share your business strategic plan with your competitiors. Right? Thought SO. If it doesn't go well, you may have NO PLAN for those planes.

And your point is? As a matter of fact, I can't quite figure out what the he!l this thread has to do with anything. The only thing I know for sure is that alot of people involved in airline management will get paid alot of money.

 

[mnboyev]

I know for sure I'm headed to Mexico on Saturday for 5 days and nites in the sun...on Sun Country.. one of the best airlines in the industry !!

Good Luck Timmy and Joe... let us know how it all works out so we know how to bid....

 

[Lear70]

so, Lear 70, it is not competition if it is not in the same Aircraft type, ???come on, It does not matter what type of Aircraft it is that is competing against you, seats in the market are seats...

OK, you're just not getting it, so I guess I'll have to explain more.

Northwest didn't operate that market to make a profit.

Northwest operated that market in an attempt to drive Midwest out of business.

The reason it didn't work is that it was never PLANNED to be a long-term competitive operation. It was believed you guys would cave LONG before they filed Bankruptcy. You didn't. They filed. Then they pulled out.

I mentioned the aircraft type to point out the aircraft/fare combination Northwest was using was a money-loser and they knew it would be that way going in.

WE at AirTran, however, can compete with you directly in the MKE because our CASM is so much lower. Not that I think a war is a good thing (it's not), but you were stating that Midwest somehow "beat" Northwest and AirTran out. You didn't. Northwest beat themselves, and we're INCREASING service.

Lear70, I believe you work in the airline industry, you should know that senority is everything. Even if you can make a few $ more at another place, you do not just give up seniority, life style, good contract and stabilty, maybe move to a new domicile, unless your company is going down the drain and they are shutting the doors.

Ummm... I believe you work in the industry as well, but that statement simply isn't true.

I worked at Pinnacle. I don't think they are going out of business anytime soon (in fact, they just bought another airline and announced a new codeshare with a bunch of new airplanes).

I took a pay CUT and a quality of life loss (short-term) to leave there to come to AirTran for a better long-term investment in my career earnings and eventual better quality of life.

Less than a year later, my quality of life is 10 times better than it was, and the money will come.

Thousands of pilots do that every year jumping from regionals to majors. By your comparison they should stay put?

Incidentally, a pilot leaving AirTran going to work for FedEx would make more than FOUR times the income than they would here over a career plus their pension which is in no danger of going away.

I think you're WAY off-base here.

But you seem to agree there is more stability at SWA or fedex vs. AAI. 2 years ago nobody would have considered AAI unstable, maybe it is a sign that things are not going to well.

Maybe it is a sign that you don't like AirTran. Your opinions are very openly biased.

FedEx is the epitome of stability. People will always need to ship packages, and their profit margins are EXTREMELY good.

SWA is arguably more stable, but with no argument in long-terms earnings potential being better than AAI by almost 3 times potential career earnings for 25+ year careers.

Maybe YOU'D be content to stay put making half what you could somewhere else with the same or better QOL.

I believe you're in the minority.

Nobody is running out the door...pleeeeez ...maybe real junior newhires that had iron's in the fire prior to AirTran .. ...who can blame em...good luck.. I just want to make it to 60..

Actually, almost ALL the guys who have left are senior to me, and I'm just over the 1,000 mark. Moved up just under 40 numbers in 3 months.

If you're not a Captain here and you get a call from FedEx or SWA, unless you just happen to live in ATL, you'd be crazy from a $$$ standpoint to stay.

 

[crashpad]

It's very entertaining to watch Tim Hoeksema do the carpet dance to save his job. Now he knows what his ground crews felt like when he told them to take a 50% pay cut or take a hike. Talk about karma!