MIDWEST where do they go from here?

[HUNTERB]

Is it me or does anybody else find it interesting that MEC at Midwest has change their mind from being neutral to now backing Midwests management. This is just hard to believe after not supporting Midwests management on almost every issue. It is interesting how things have change after the MEC met with Airtans union, CEO, and then with Tim H. just before the board recommended that shareholders not tender their shares. I can't believe that we as a union can support an expansion plan that includes 50 seat rj's and two MD-80's that we have'nt even signed a lease on yet!!! To get the unions support something must be going on behind closed doors. Just what that is I have no idea. Anybody got an opinion?

 

[DH106]

Tim H.? You're talking about the guy who invented the concept of "things going on behind closed doors."

This expansion plan is laughable. Uncle Tim's only idea of an expansion plan is one that expands his wallet.

 

[FlyWolf]

no comments

I am eagerly waiting for my second swa interview though.

 

[Flydaplane]

It is weird that the Hard As*es in the union who attack management on every issue would suddenly back Tim's grand plan. Not sure what they saw or heard, but I am very curious. Remember pre 9/11 they were planning on having 1000 pilots on the property. Maybe he's reinvented that plan.

Not sure how we can go from Fall of 95 "were beginning to retire the 80 fleet due to mx and fuel costs" to "we're beginning our expansion with the addition of 2 MD88's" in a year's time. Have they ever had a five year plan?

 

[Flydaplane]

By the way....did you get your W-2 yet, mine still hasn't come?

 

[FlyWolf]

It is weird that the Hard As*es in the union who attack management on every issue would suddenly back Tim's grand plan. Not sure what they saw or heard, but I am very curious. Remember pre 9/11 they were planning on having 1000 pilots on the property. Maybe he's reinvented that plan.

Not sure how we can go from Fall of 95 "were beginning to retire the 80 fleet due to mx and fuel costs" to "we're beginning our expansion with the addition of 2 MD88's" in a year's time. Have they ever had a five year plan?

From what I heard, management met with the union and showed them the future plan and the MEC decided that its the best course of action for our pilots. As I said, according to the new age 65, I see myself upgrading right around age 63.5 (and I am not that old )

Oh, yes, I did get my W2

 

[FlyWolf]

They said the future plans will knock your socks off, Flydaplane, make sure you carry an extra pair of socks

 

[Flydaplane]

That's funny, the last trip I was on I ripped a four inch hole in the side of my shoes, so I did wear an extra pair of socks. Of course it was -25 with the wind chill.

 

[roughneck]

I think you guys may turn the tables on AirTran. You may end up getting their 717's. I think SWA may get the 737's.

 

[-9Capt]

Business News
AirTran Hits the Right Note in Midwest Bid
By Ted Reed
TheStreet.com Staff Reporter
2/6/2007 8:21 AM EST
URL: http://www.thestreet.com/newsanalysis/businessnews/10336937.html



While the proposed merger of US Airways (LCC) and Delta (DALRQ) has gone the way of the dodo, the effort to combine AirTran (AAI) and Midwest (MEH) still has wings.
The failed US Air/Delta deal died of multiple causes: It was a tough sell to regulators, employees and Congress, and it was opposed by Delta management. The combination of AirTran and Milwaukee-based Midwest, however, suffers from fewer maladies.
While Midwest management is most certainly opposed, regulators likely would not be. Wisconsin politicians are opposed, but employees seem less concerned than Delta employees were.
Contraction vs. Expansion
Fundamentally, US Airways had far different intentions than AirTran has. The former, which last week withdrew its $10 billion bid for Delta after a rejection by bankruptcy creditors, planned to shrink the combined fleet's capacity by 10%.
AirTran, which last week extended a $345 million tender offer for Midwest until March 8, wants to use the carrier as a platform for expansion.
"Our play is about facilitating growth," Kevin Healy, AirTran vice president of planning, said in an interview. "It involves leveraging the strength of both carriers, which have complementary networks, to create a truly national low-cost carrier. The two [takeover efforts] are at opposite ends of the spectrum."
To be sure, the deals look the same to targeted managements who feel they have fixed their airlines since the Sept. 11 attacks triggered a restructuring of the airline industry. Delta remade itself into an international carrier poised to extract maximum benefit from its position as the biggest carrier at the world's busiest airport in Atlanta.
Midwest has also remade itself. "Prior to 9/11, we were high cost, high yield, with 50% yield premiums," CEO Tim Hoeksema said at the Raymond James airline conference last week. "During the last five years, we have been working very hard to restructure our company, to do a lot of things that would make us stronger. We brought our costs down 32%. The results of lots and lots of work and effort are beginning to show in 2006."
Last week, Midwest reported net income of $5.4 million for 2006, reversing a year-earlier loss of $64.9 million, and forecast nearly twice the 2007 per-share earnings that analysts had expected.
Hoeksema said the airline now plans to expand its fleet. Short term, it has signed a deal for a partner to provide up to two dozen 50-seat regional jets, and it plans to acquire two MD-80 jets. Long term, it is talking to both Airbus and Boeing (BA) about replacing its 13 MD-80s. Midwest also has 25 Boeing 717s.
AirTran's Healy said Midwest's problem is that a demand glut means it will have trouble securing competitively priced aircraft. AirTran, by contrast, has firm orders for 60 Boeing 737-700s, acquired at low cost because the order was placed in 2003 when few carriers were buying.
Carol Skornicka, Midwest corporate counsel, counters that AirTran's problem is it has too many aircraft orders. "We don't need to be fixed," she says. "AirTran needs to be fixed. They went crazy and bought 100 airplanes, and now they don't know where to put them."
Local Hubbub
Midwest's Milwaukee hub would be the centerpiece of AirTran's expansion efforts. Daily departures would grow from about 85 today to about 150 within two years. AirTran would add destinations, including West Coast cities that Midwest is only minimally equipped to serve nonstop because few of its MD80s have sufficient range, Healy said.
That is a far cry from the potential fate of Charlotte, US Airways' largest hub, if a merger with Delta had occurred. US Airways had indicated it planned to reduce capacity at Charlotte -- substituting small jets for big ones that could have been better used in Atlanta, potentially reducing the number of banks and giving up gates.
Despite the growth prospects, the proposed takeover of Milwaukee's hometown airline has generated opposition. In a letter to AirTran CEO Joe Leonard, U.S. Sen. Herb Kohl, a Wisconsin Democrat, wrote: "It is in the interest of Wisconsin consumers, as well as the greater Milwaukee economy, for Midwest Airlines to operate as a locally based, independent airline." An antitrust subcommittee Kohl heads would review the proposed merger -- although it appears to raise minimal antitrust concerns.
Additionally, leaders of the Midwest chapter of the Air Line Pilots Association unanimously passed a resolution supporting Midwest's stand-alone plan. The pilots were initially neutral but said they had since studied the plan. They are clearly more restrained than were Delta pilots, whose leader Lee Moak had vowed to "kill the merger."
Healy said the contrast in the two deals explains the difference in the pilots' positions. The US Airways deal failed to win support, he said, because if "you get rid of airplanes, it's usually not a good thing for the guys flying them." Midwest pilots, he said, would have far better career opportunities at a rapidly expanding carrier.

--------------------------------------------------------------------------------

 

[mnboyev]

Ahh.. its a done deal.. give it time..

Now.. for the plan a couple MD 80's and some skywest rj's? We have a plan dammit... and it is a good one !! not sure I understand the MEC support either.. wouldnt neutral be better politically?

All I heard is they (the board) want more money from Joe and he was a little too opportunistic.. Oh well... the saga continues.... good humor for the water cooler chats.

gotta go shovel the drive.. final got some snow !

 

[ultrarunner]

Didn't the MidEx MEC have a 'vote of no confidence' against MEH management? If so, did they then subsequently retract it. Not that either means a darn thing....

 

[Eagle757shark]

Ahh.. its a done deal.. give it time..

Now.. for the plan a couple MD 80's and some skywest rj's? We have a plan dammit... and it is a good one !! not sure I understand the MEC support either.. wouldnt neutral be better politically?

All I heard is they (the board) want more money from Joe and he was a little too opportunistic.. Oh well... the saga continues.... good humor for the water cooler chats.

gotta go shovel the drive.. final got some snow !

It is always about the MONEY. This is corporate america. If you read most of Midwest responses, they always seem to indicate that the offer is not high enough. I personally believe the extentsion to March 8th by AirTran may be an indication they may up the offer. Every shareholder at Midwest with a pulse probable knows about the current offer. I believe the Midwest board has a price in mind. The question, will AirTran come back with that price? Now as far as being opportunistic, I believe AirTran sees an opportunity to develop a strong low cost nationwide network. Someone please explain the logic to me! AirTran has 60 firm 737-700 orders at a great price and would like to grow the number of flights in MKE. This growth will bring MORE JOBS to the city and more direct flights. The politicians think this is a bad thing? Midwest management wants to grow the airline with old MD-80s and 50 seat RJs (check fuel is near 60 dollars a barel again). AirTran ranks third in overall customer satisfaction by the DOT for 2006. Jetblue and Southwest rank first and second respectively. AirTran has been profitable 8 years in a row. AirTran wants to bring more jobs and revenue to the city of MKE and the state of Wisconsin. The only jobs that would be affected would be senior management at Midwest. AirTran doesn't want to destroy Midwest but AirTran wants to bring more opportunities to a community and allow it to grow with an up and coming airline. Midwest own spokeswoman said that AirTran has a bunch of aircraft on order and no where to put them. SO, that is a good problem to have if you are profitable! She goes on to say that Midwest is negotiating with Boeing and Airbus for future aircraft. Well hello, the earliest you could probable get a boeing wouldn't be for 3 years. Tell me if I'm missing something here? Nothing against Southwest, it is a great company. But if Southwest made this offer, we'd here from all in MKE how this is the greatest thing and how this is going to elevate MKE. Again in corporate america, everyone has their price! What is Midwest's?

 

[SkiFishFly]

Gotta laugh at this one

Carol Skornicka, Midwest corporate counsel, counters that AirTran's problem is it has too many aircraft orders. "We don't need to be fixed," she says. "AirTran needs to be fixed. They went crazy and bought 100 airplanes, and now they don't know where to put them."

She has no idea what she is talking about. The official price is undisclosed but I have heard we are purchasing these aircraft at 3-10 mil below current market price.
Gee it sure is a real problem when you are buying 100 aircraft like the 737 for significantly less than what you could sell them on the open market. Oh yeah, did she forget that our other cost are also lower than that of our competitors...

 

[Murphy]

Time to throw in the towel and join us Midwest. It's the right thing to do for both companies. The only people stopping this is Midwest management because they don't want to see what it feels like to be a furloughed pilot looking for a new job.

 

[Flydaplane]

Now that would be sweet; seeing those idiots dusting off their resumes and hitting the streets. Too bad there's not 10,000 others (in their line of work) looking for jobs at the same time while there are only about 200 being hired a year (reflecting back to 9/11). Too bad their severance packages are probably a little better than "you'll maintain your health insurance through the end of the month." (I think that's what mine said)

 

[Ty Webb]

Seems to me Carol's big mouth pretty much cost her any future position in a merged company . . . .

This is one management group that has shown they know how to hold a grudge and take things personally. . . . Saying they "went crazy" and "bought too many airplanes" . . . . . she might as well have said they were "on crack" and were "under-endowed".

.

 

[TWA Dude]

I know it wounds the pride to hear your company dissed but the fact is that AirTran is having a problem finding a place to fly all those new 737s. You need another hub outside of GA-FL. Where's it gonna be?

 

[pit717]

when did someone say we had a problem putting airplanes in places............dont think so

 

[Eagle757shark]

I know it wounds the pride to hear your company dissed but the fact is that AirTran is having a problem finding a place to fly all those new 737s. You need another hub outside of GA-FL. Where's it gonna be?

There is no secret that AirTran has many new 737 aircraft coming. Everyone that works at AirTran also knows that AirTran needs more space and there is not much space left in Atlanta. AirTran has attempted to do more point to point flying. Some of the point to point has been successful and some has been stopped. Do I think AirTran feels dissed or feel their pride has been hurt? No sir! AirTran sees a business opportunity right now in MKE, purely business. On March 8th, AirTran may move on and pursue other interest to further their business plan. It still doesn't change that AirTran has the lowest cost pre-fuel in the industry, AirTran has been profitable 8 years straight,and AirTran is forecast to be profitable for all of 2007 as well. TWA Dude, MKE and Midwest are not the only game in town. It probable makes the most sense at this particular moment, but is not a make or break for AirTran. Again 50 seat RJs at 60 dollars a barel in fuel has been shown not to be a profitable venture. That would be evident by every carrier under the sun trying to reduce their 50 seat RJ flying, OK except Midwest. By the way check a little history AirTran tried what Midwest wants to do a few years back through Air Wisconsin with 50 seat RJs. This was when fuel was less than 50 dollars a barel. Let me just say history shows, AirTran was able to remain profitable doing it solely with the 717. NO ego, no pride, just a business opportunity that looks right for now to AirTran!

 

[FlyWolf]

Eagle, we have a lot of small markets we need to serve, and these small markets are bringing a lot of connecting passengers to mainline (I think the number is 42% or so that are connecting to mainline). I think even Airtran said that they will have to use RJ's in MKE if the deal goes through, they said the reason the Air Wisky program didn't make sense was due to the lack of space in Atlanta.

 

[Eagle757shark]

Eagle, we have a lot of small markets we need to serve, and these small markets are bringing a lot of connecting passengers to mainline (I think the number is 42% or so that are connecting to mainline). I think even Airtran said that they will have to use RJ's in MKE if the deal goes through, they said the reason the Air Wisky program didn't make sense was due to the lack of space in Atlanta.

The industry is heading back toward the Turboprop for small communities with the current fuel cost. Contential is an example with the addition of the Q400 turboprop for the northeast markets. I believe if this merger were to go through, you would see AirTran lean more toward the 70-90 seat aircraft to serve some markets and keep Turboprops on the smaller markets. Air Wisky didn't work because it was more economical to run 717s than 50 seat RJs on many of the markets it was serving.

 

[TWA Dude]

when did someone say we had a problem putting airplanes in places............dont think so

So there's room for another 100 737s in ATL? Didn't think so.

 

[TWA Dude]

Eagle757shark: I didn't need that lecture. I was only addressing the response by a couple of posters to the Midwest legal counsel lady. Not that my opinion matters but as a citizen of Southeastern Wisconsin I think Midwest should agree to a buyout when the offer is right.

 

[Propsync]

Ty- You're right on about the management.

Wolf- I've heard around 28% at Skyway. Although I can't remember if that is total emplanements or percent of connects.

Eagle- Per seat it was cheaper to use mainline aircraft. I don't know if AW was profitable, but it was revenue limiting by only having 50 seats instead of 120 or so seats. Plus, I'm sure the cost between the two was close.

TWA- AirTran would get an increased benefit by getting rid of the 80's with 737's. That's 10-15 less airframes you have to try to find a home- and compete with.

As far as the union backing management, it seems odd to me, too. I heard PROPOSED intergration was on the lines of 6 or 7 to 1. That's about the only reason I can see the union backing management. Me? I say get it done.

 

[mnboyev]

Ahh.. Tranny will put them jets somewhere... good product (not the best care in the air) but a dam good product.. reliable, friendly, innovative, and dedicated.... Good connections.. Good frequency.. New equipment... Secure Jobs... Traditional airline...

Carol....her comments are silly.. period... looks like a college business game. Plenty of room in BWI.. PHL.. BOS.. CAK.. ATL D Concourse is growing every day.. MSP is growing bigger every year...(future concourse expansion at HHH terminal) Just to name a few... but I'm open to other views..

Dude... there are plenty of places to stuff jets .... Look at JB.. they found all kinds of places to put their blue equipment... And in the toughest neck of the woods..

This deal would be good for MKE.. the employees .. the passengers.. and the industry... continued competition.. and product improvement.... better connections.. more frequency.. more destinations.. maybe even keep the warm cookies baked by some Racine Mama...

Cheers dude.

 

[Eagle757shark]

I know it wounds the pride to hear your company dissed but the fact is that AirTran is having a problem finding a place to fly all those new 737s.

No secret that AirTran has a space problem for their forecasted aircraft orders. However, I don't think any of us here at AirTran feel dissed or think our pride has been hurt. Day to day it is business as usual at AirTran. If the merger goes through, we adjust. If the merger doesn't go through, we go on doing what we do. Now that the lecture is over, back to my breakfast and the chores left by my girlfriend!

 

[mnboyev]

Feel it ? The tide is changing.... This deal will get done !!

 

[mnboyev]

Shark... screw them chores... go have fun !! I'm gonna hang some shelves in the laundry room !!! Fun Fun Fun... I love woodworking... How do we get ourselves into this ?

Peace everyone...

 

[FlyWolf]

Feel it ? The tide is changing.... This deal will get done !!

I am right there with you, but (and here comes the but)

The current offer didn't get enough shareholders to tender, I guess if MEH is trading at $14, why would anyone tender their shares at 13.25 right? they can just go sell it for $14 or whatever its trading at if its higher than airTran offer.

Also only 39K shares were tendered, thats less than 1%, so that means the share holders are not convinced yet.

So, what is next? wait till 03/08 and see what will happen otherwise we are stuck at the current situation???