Midwest has more than one foot in the ground

[maxblast72]

Southwest is calling it system optimization. They could reduce frequency in some of their core markets (like DAL-HOU or PHX-LAS) that used to have over 15 flights a day. This will free up airplanes to add new cities and routes while not getting new airplanes.

The new routes can probably fetch better RASM performance than forcing the 13th, 14th, and 15th flight per day between PHX and LAS. In the boom days 3 years ago, the core cities could probably produce pretty good results, but it is a different story in 2009.

Imagine that, a management team that is changing their route network to better suit the current economic realities.

 

[vixin]

Thats what we are doing. Just moving planes from other routes.

 

[FlyWolf]

Could Southwest move rekindle AirTran Midwest bid?

Posted on May 20, 2009 at 1:16 PM
Filed under: Acquisitions | Corporate Strategy
Tagged: airtran airways , midwest air group , southwest airlines

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Southwest Airlines Co.'s (NYSE:LUV) plans announced Wednesday to begin service in Milwaukee appear targeted at slowing the growth of rival discounter AirTran Airways Inc. (NYSE:AAI) in the market. But the real loser in the coming fare war seems likely to be TPG-owned Midwest Air Group Inc., the one-time dominant force in the market that has fallen upon hard times in recent years.

Midwest first hit turbulence in late 2006, when AirTran went public with an offer to buy the company. A bitter proxy fight followed, with AirTran losing out to a rival bid from white knight TPG and backed by Northwest Airlines Corp. But AirTran went on to increase its own flights out of Milwaukee, and that plus and the economic downturn put Midwest deep in the red. In September 2008 Midwest announced plans to outsource a large part of its flying to Republic Airways as part of a dramatic shrinking of its business.

Midwest remains locked in a battle with its unions over the Republic deal, and it has been losing share in Milwaukee to AirTran. Republic in its 10Q filing earlier this month said Midwest had delayed payments totaling $3.3 million due to it, saying it was monitoring Midwest's financial condition and working with management and Midwest's financial advisers.

The addition of Southwest, even in a limited capacity, figures to further drive down margins and could drive a fare war between Southwest, AirTran, Midwest and Northwest acquirer Delta Air Lines Inc. (NYSEAL). It seems unlikely that all four will survive a war, with Midwest the most obvious potential casualty.

Whatever the outcome, the Southwest move appears targeted at AirTran and not Midwest. Though Southwest has slowed its overall growth, it has in recent years targeted specific cities where other discounters are strong, namely Frontier Airlines in Denver and JetBlue Airways Inc. (NASDAQ:JBLU) in Boston. Southwest recently launched service between Baltimore and Boston, one of the first non-Florida routes where it and AirTran go head to head.

AirTran has a reputation for (wisely) backing away from a fight with Southwest, but Milwaukee might be different. The Orlando, Fla.-based discounter envisioned Milwaukee as its long-sought Midwestern hub, an escape from the bitter battles it fights against Delta in Atlanta, where the two carriers have their primary hubs. A Southwest build-up could lead AirTran to approach TPG about renewing its interest in Midwest, potentially seeing new value in buying up that company's list of loyal fliers.

AirTran has spent considerable resources building a foundation in Milwaukee. This might be the market where the company finally sticks around for the fight. - Lou Whiteman

Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman

 

[Jetjockey]

Bid on what???? A contract with 2 regional airlines and a bunch of cold pre-baked cookies cookies sitting in a warehouse?

 

[jravi8tor]

Bid on what???? A contract with 2 regional airlines and a bunch of cold pre-baked cookies cookies sitting in a warehouse?

Hoeksema' retirement party! Other airline management teams would love to show their graditude towards TH on his accomplishments (the demise of a once great airline). Cookies come complimentary, but there is a buy on-board dinner/snake package available.

 

[Donsa320]

Bid on what???? A contract with 2 regional airlines and a bunch of cold pre-baked cookies cookies sitting in a warehouse?

A signifcant number of slots at LGA and DCA. The only way ro get them is to buy the certificate. With the certificate come the pilots. This should be interesting.

 

[mynameisjim]

A signifcant number of slots at LGA and DCA. The only way ro get them is to buy the certificate. With the certificate come the pilots. This should be interesting.

Did the ATA pilots go to Southwest when Southwest bought ATA's certificate and slots?

 

[Wesb737fo]

Did the ATA pilots go to Southwest when Southwest bought ATA's certificate and slots?

I can safely say with all the confidence and sarcasm....that's a big fat Noooooo.

 

[meigwo]

Republic Airlines to Operate Embraer 190AR Jets for Midwest Airlines

MILWAUKEE & INDIANAPOLIS--(BUSINESS WIRE)--Midwest Airlines and Republic Airways Holdings (NASDAQ: RJET - News) today announced an expansion of the air services agreement (ASA) between Midwest Airlines and Republic Airlines to include the addition of new Embraer 190AR jets. The E190s will be configured to seat 100 passengers in a single cabin with seating choice that includes 20 Signature seats. The initial order includes two of the E190AR aircraft.



Midwest will introduce the new service in August and September, and will announce new routes and schedules in the near future.
“The addition of the E190s will provide us new flexibility in terms of our route network and range, with the potential to once again fly nonstop to the West Coast from our Milwaukee hub,” said Timothy E. Hoeksema, Midwest Airlines chairman, president and chief executive officer. “Our expanded agreement with Republic allows us to leverage the cost efficiencies of a large regional airline, while providing our customers with service to more destinations.” Hoeksema said the Embraer aircraft are part of a comprehensive fleet plan currently being finalized by Midwest.
“We are pleased to build on our successful relationship with Midwest Airlines by initiating E190 jet service at Republic,” said Bryan Bedford, chairman, president and chief executive officer of Republic Airways. “These aircraft are as impressive in their performance capabilities as they are in their on-board comfort, and will be a valuable asset in supporting the expansion of the Midwest brand to new routes.” Republic began flying for Midwest under the Midwest Connect brand in October 2008 and currently operates twelve 76-seat Embraer 170 jets. Republic operates a total of 130 E-Jets on behalf of Midwest and its other partners, including Delta, United and US Airways.
With the start of service, Republic Airways will become the first regional airline operator to fly the industry-leading aircraft, which combine a “big jet” feel and impressive mission performance with economically and environmentally friendly operating efficiencies.
The E190 aircraft will be sourced through a 60-month Aircraft Lease Agreement between Republic and GE Commercial Aviation Services LLC (GECAS).
About Midwest
Midwest Airlines features jet service throughout the United States, including Milwaukee’s most daily nonstop flights and best schedule to major destinations. Catering to business travelers and discerning leisure travelers, the airline earned its reputation as “The best care in the air” by providing passengers with impeccable service and onboard amenities at competitive fares. More information is available at midwestairlines.com.
About Republic
Republic Airways Holdings, based in Indianapolis, Indiana, is an airline holding company that owns Chautauqua Airlines, Republic Airlines and Shuttle America. The airlines offer scheduled passenger service on approximately 1,200 flights daily to 105 cities in 36 states, Canada, Mexico and Jamaica through airline services agreements with seven U.S. airlines. All of the airlines’ flights are operated under their airline partner brand, such as AmericanConnection, Continental Express, Delta Connection, United Express, Midwest Connect, Mokulele Airlines and US Airways Express. The airlines currently employ approximately 4,500 aviation professionals and operate 215 jets.

 

[FlyWolf]

Disgusting.