Midwest To Talk Merger With AirTran

[FlyAirtran]

http://www.btnmag.com/businesstravelnews/search/article_display.jsp?vnu_content_id=1003618942

Midwest To Talk Merger With AirTran, Others

JULY 31, 2007 -- Midwest Airlines' board of directors today said it has formed a committee to "explore strategic and financial alternatives," including talks with takeover hopeful AirTran Airways and other undisclosed "financial parties that have recently expressed interest in pursuing a transaction with Midwest."

The board said it has not changed its recommendation to forego a merger with AirTran in favor of its go-it-alone plan, but the newly established committee said it would make a recommendation to the board after exploring alternatives. "There is no assurance that this process will result in a transaction with AirTran or any other party," Midwest said today in a statement.

Since AirTran began pursuing its hostile takeover bid late last year, a reluctant Midwest has been confronted with extended deadlines as well as pressure from some shareholders. Midwest last month said it would allow AirTran's parent company to present its $389 million merger proposal, following preliminary results that showed the election of three AirTran-nominated candidates to Midwest's board, which Midwest management had opposed. One of AirTran's confirmed nominees is on Midwest's five-person exploratory committee.

AirTran chairman and CEO Joe Leonard in a statement today said, "We are pleased that Midwest has taken the step to form a special committee, and we look forward to working with the committee."

Samuel Skinner, head of Midwest's committee and a former Secretary of the U.S. Department of Transportation, in a statement said, "On April 12, the board recommended that shareholders reject the most recent AirTran offer. At that time, the board concluded that Midwest's strategic plan provides more attractive long-term value-creation opportunities for shareholders," he explained. "By providing AirTran and other interested parties with access to our confidential information and holding discussions with them, the board is pursuing a process to evaluate whether greater value can be delivered to shareholders through a near-term transaction."

Midwest would not give a timeframe for discussions, saying it "cannot commit to when it will comment further."

 

[Lear70]

and other undisclosed "financial parties that have recently expressed interest in pursuing a transaction with Midwest."

I call bullsh*t.

Other, undisclosed financial parties... only NWA at a drastically lower price to prevent AirTran from obtaining such unrestricted access to the market.

 

[PCL_128]

I call bullsh*t.

Other, undisclosed financial parties... only NWA at a drastically lower price to prevent AirTran from obtaining such unrestricted access to the market.

Exactly. I can't imagine that any other airline would have the slighest interest in acquiring an airline with a bunch of 717s and a few maddogs. Typical BS to feed to the financial press. Looks like Timmy is finally starting to see the light. I bet they put together the framework for an agreement within the next month.

 

[CitationLover]

I call bullsh*t.

Other, undisclosed financial parties... only NWA at a drastically lower price to prevent AirTran from obtaining such unrestricted access to the market.

for the longest time a rumor was running that Sen. Herb Kohl was interested in purchasing the airline and taking it back private. who knows.

 

[CitationLover]

....I bet they put together the framework for an agreement within the next month.

just like you predicted oil be under $40..........

 

[GOULET!]

Interesting that you bring up Sen. Kohl. He was spotted at the airport in MKE yesterday. Could be just coincidence but very interesting timing. I would love to see him take over the airline and make it private.

Wouldn't be suprised at all if SkyWest is another airline interested in Midwest. Already flying CRJs for the Air Group and they have always expressed interest in bigger airplanes.

AirTran is junk. Id much rather have SkyWest buy Midwest than AirTran.

 

[PCL_128]

just like you predicted oil be under $40..........

Hey, the deadline ain't up on that yet!

 

[Lear70]

Interesting that you bring up Sen. Kohl. He was spotted at the airport in MKE yesterday. Could be just coincidence but very interesting timing. I would love to see him take over the airline and make it private.

Wouldn't be suprised at all if SkyWest is another airline interested in Midwest. Already flying CRJs for the Air Group and they have always expressed interest in bigger airplanes.

AirTran is junk. Id much rather have SkyWest buy Midwest than AirTran.

Yeah. AirTran is junk. Especially with that profit we posted last quarter and not mentioning the last many profitable years. Terrible airline. Just awful financials.

Compared to a regional who only makes money because they're paid a set fee to operate an admittedly-unprofitable airframe.

Sure, that makes sense.

Have you ever seen the data from Bombardier on operating cost with current fuel prices? Ever heard of Independence Air?

No way you can make money off 50-seat RJ's with today's fare and oil prices. Skywest is profitable because of how much they are paid to operate the airplanes. Period.

Have any other incredibly keen financial insights to offer?

 

[Diesel-9]

I would guess Sen. Kohl gets something done or NWA gets aggressive. I doubt Joe (F.L.) Leonard will be in MKE.

 

[ultrarunner]

The price of MEH stock is too high to consider a pvt equity buyout. The time for that would have been at the 5 or 6 dollar price.

Kohl or any other private equity is STILL going to want a return on their investment. It's as simple as that.

And remember, pvt equity buyouts are NOT the answer for the lack of a sound business plan which provides a return on shareholder investment. If you have the latter, you don't sweat the former and we're not even having this discussion.

 

[VeeOne]

SkyWest buys Midwest Express. Delta repurchases ASA from SkyWest.

 

[Gear Down]

Northwest wants Midwest to keep Airtran out the area. Fork Lift Joe doesn't have the capital to close this deal! Watch the sparks fly in the coming weeks!

 

[twepilot]

Well, there it is boys. THE number one most ridiculous Flightinfo posts of the modern era.

RV

 

[PCL_128]

Northwest wants Midwest to keep Airtran out the area.

Northwest doesn't have a choice. If the MEH deal falls through, then I'm sure we'll just scoop up as many gates as possible in that fancy new Indy terminal that should be completed soon. One way or another, Joe's got his mind set on competing in the midwest market.

 

[CitationLover]

Northwest wants Midwest to keep Airtran out the area. Fork Lift Joe doesn't have the capital to close this deal! Watch the sparks fly in the coming weeks!

yes the 400 pilots at midwest are the "staffing solution" at northwest!

 

[DenverCrashpad]

http://www.savethecookie.com/

If you've never flown Midwest, it is the only good airline out there. They treat there customers right and provide an excellent product. They've won numerous awards and are by far the best domestic airline. There pilot group isn't treated nearly as well as they should be but they don't belly-ache and they do there job without b$tching. They take care of their responsibility.

AirTran (Valuejet), is junk. They are terrible to fly on and aren't even in the running for good customer service. They're president is a fat slob.

Save the Cookie!

 

[ultrarunner]

Denver, tell it to a shareholder that wants a return on investment.

Not that I disagree with you statements...it's the attempt to take out the emotions that make this so difficult.

The trend is shifting...folks want a cheap fare....and if MEH could compete as it did years ago...by charging a premium in return for GREAT customer service, MEH wouldn't be growing the airline with cramped little RJ's.

 

[PCL_128]

If you've never flown Midwest, it is the only good airline out there. They treat there customers right and provide an excellent product. They've won numerous awards and are by far the best domestic airline. There pilot group isn't treated nearly as well as they should be but they don't belly-ache and they do there job without b$tching. They take care of their responsibility.

AirTran (Valuejet), is junk. They are terrible to fly on and aren't even in the running for good customer service. They're president is a fat slob.

Save the Cookie!

Well, you certainly don't get a cookie for your spelling.

 

[FlyAirtran]

AirTran (Valuejet), is junk. They are terrible to fly on and aren't even in the running for good customer service.

ummm I guess somebody disagree with you..

2007 Airline Quality Ratings
http://www.bizjournals.com/wichita/stories/2007/04/02/daily2.html

The rankings:
1 Hawaiian
2 JetBlue
3 AirTran
4 Frontier
5 Northwest
6 Southwest
7 Continental
8 United
9 Alaska
10 American
11 ATA
12 Delta
13 US Airways
14 SkyWest

 

[Kharma Police]

They're president is a fat slob.

Are you refering to Joe or Tim?

 

[twepilot]

so much credibility with so little grammar...

RV

 

[Propsync]

If you've never flown Midwest, it is the only good airline out there. They treat there customers right and provide an excellent product. They've won numerous awards and are by far the best domestic airline. There pilot group isn't treated nearly as well as they should be but they don't belly-ache and they do there job without b$tching. They take care of their responsibility.


Save the Cookie!

Right, because that's what Midwest tells you. Last I checked, people don't go online to see what airline won an award and then buy a ticket. Also, I didn't quit Skyway partly because they understaffed their wholly-owned regional and cancelled a ton of flights as a result. And Midwest never does fuel stops in the 80 to make it to the west coast with a full plane, or block a ton of seats so they can make it without a stop. It will even happen going to Florida if they need a lot of alternate fuel. That's good service culture right there. Good to see Midwest never does anything wrong. At least that's what you were told to believe. Feel free to make up your own mind anytime.

Face the real facts. AirTran knocked, Midwest said no, then failed to produce the big numbers they said they would. Midwest had a chance to do it, and failed big time. Combined, the airlines look really good on paper. I'd like to see the non-shareholder 'Save the Cookie' BS to sit down and stfu. This is business folks, not some sentimental attachment to a frickin' cookie.

 

[CitationLover]

skyway was understaffed because the majority of the new FO's within the last 2 years at midwest came from skyway.

as far as fuel stops, its a matter of business. the customers do not seem to mind as you put it, since they only see $$$$. most customers ride on a midwest 717 and would be willing to pay a little extra for it, that should tell our revenue managers something (ie don't conduct a massive faresale last year selling 2Q tickets this year to lower our yield).

i love how 1Q in peoples minds here determines a "failed" plan. we'll see what happens in the future. i would hope if we get bought it is by air tran and not northwest. the idea of spending an eternity on reserve in MSP waiting to flow back to compass does not sound too appetizing.

my prediction: air tran extends on 8/10 the offer and ups the price a little.

 

[Propsync]

You're right about the FO's CL. But do you realize how much that cost Midwest? Each Skyway pilot (assuming jet capt. here) caused FIVE training events. What do FIVE training events cost? I've always heard ten grand per event, but once again, just a ballpark. So that's 50 grand. A guy from Eagle or elsewhere would only cost ten grand. So they spent an additional 40 let's say, just to get a Skyway guy. If I'm off on cost, don't beat me up about it, four times more expensive is good enough.

So Midwest spent more money than they needed to on training. On top of that, the two (same) companies never talked about how many to take from Skyway and when. At two companies that are so terribly small that can't get 50 planes staffed right is inexcusable. They sent Skyway guys to Midwest and had Skyway cancel flights. At a time when everything needed to be perfect to make tons of money, prove everyone wrong, and keep Airtran away.

Fuel stops are bad customer service and are a result of consistantly not buying the correct airplane. Midwest should be so lucky anybody wants them with a fleet of out-of-production airplanes. I'm sure (joking here) Boeing and Airbus don't want an order, as it would be the kiss of death to the type ordered. Five (soon to four) fleet types is a heck of a way to serve 50 destinations.

Cl, it's not what is happening, it's how it's happening. It's not that the 'Plan' isn't working, you guys are making money. The problem is everyone sees a bunch of money to be made right now and Midwest can't seem to make what they said they would. If Airtran went away, how much would the stock really be worth? 6-7. Airtran offers a quick buck and an easy out at 15 or so. Take it and work to make a great merger.

 

[IdRtherBsailing]

I was on the j/s from LGA to MKE last week. The a/c was about 40min late. After we boarded and went to taxi we then found out that we were about number 45 for takeoff. During the excruciating slow taxi all westbound departures were stopped. We sat on the ground for about 3 or 4 hours(I lost count but it was a long time). The capt continuously checked on the pax and they were doing fine. We finally got into MKE where everyone knew they missed their connections and I was shocked. I would say 86 of the 88 pax were still happy. In fact they were thanking the crew for doing a good job, keeping them informed, "getting us here", etc etc. Midwests customers love them and its because of the service. Its ashame the people who fly MidEx are not the ones who own them. Or Us I guess since I work here now. Keep forgetting that with all this time I have off.

 

[NuGuy]

Heyas,

I wouldn't be surprised to see NWA make a bid for Midwest, if for no other reason to drive the price up. They could almost offer an all cash deal after the profit in the last quarter.

As Gordon Gekko once said: "Never get emotional about stock", and it seems like Joey Leonard has a serious bug up his tail about MEH. NWA could run up the price just for sh!ts and giggles.

Despite it's decrepit state, NWA can still wreak a LOT of havok in the industry, and an injured animal is usually when it's most vicious.

Nu

 

[Fly4hire]

Northwest doesn't have a choice. If the MEH deal falls through, then I'm sure we'll just scoop up as many gates as possible in that fancy new Indy terminal that should be completed soon. One way or another, Joe's got his mind set on competing in the midwest market.

I beleive all gates at the new IND terminal are spoken for. How many does AT have assigned? I think NW has 10 already.

 

[PCL_128]

I beleive all gates at the new IND terminal are spoken for.

That's possible. It's been a few months since I heard anything about IND, but when I was in indoc, it was mentioned as a possible alternative. There were several other options mentioned, also. Basically, Joe will find a way to squeeze AAI into the midwest market. I suspect that the MEH deal will go through without any interference from NWA, but if not, then some other alternative will be used.

How many does AT have assigned?

Can't remember. I know we have several, but I don't know the exact number.

 

[Fly4hire]

yes the 400 pilots at midwest are the "staffing solution" at northwest!

What is really the issue is who the shareholders and BOD will want as their corporate parent if they see a buyout/ merger as unavoidable. I'm guessing NW is one of the other interested partners and they'll take NW due to the established MKE market presence and "the enemy of my enemy is my friend". I'm speculating that would probably be the pilots choice as well, if for no other reason than ALPA merger policy.

 

[CitationLover]

What is really the issue is who the shareholders and BOD will want as their corporate parent if they see a buyout/ merger as unavoidable. I'm guessing NW is one of the other interested partners and they'll take NW due to the established MKE market presence and "the enemy of my enemy is my friend". I'm speculating that would probably be the pilots choice as well, if for no other reason than ALPA merger policy.

not this pilots choice, i do not have shiny-new-787 syndrome.