Midwest's ugly situation

[~~~^~~~]

Pilots don't buy gas. Cutting a Captain's pay by $80 is not going to offset a 300% increase in fuel costs. Appears MidWest is about to have it's flying replaced by the regional guys.

In retrospect the perfect plan for NWA would have been to let AirTran dilute it's cash position. How much money did NWA invest in keeping AirTran out?

Good luck to all the fine people there. This looks bad.
-----------------

The Midwest Airlines pilots do not plan to even vote on the troubled company's demands that would slash their pay by up to 65 percent, according to Jay Schnedorf, a captain and chairman of the Midwest unit of the Air Line Pilots Association (ALPA).
Schnedorf told SBT, "There will be no vote on their proposal. It's unacceptable on its face. We are planning a counter-proposal to present back to the company … We've told them (company officials) their demands are unacceptable."
Midwest Airlines is demanding that pilots take pay cuts of 45 to 65 percent. Schnedorf said a junior captain's annual salary would drop from $120,000 to $31,000.
With a wife and two children, a pilot earning $31,000 would qualify for the Wisconsin BadgerCare health care program for the working poor, at taxpayers' expense, Schnedorf said.
A Midwest senior captain's salary would drop from $150,000 to $79,000 under the company's proposal, he said.
The company already has furloughed 35 of its 400 pilots and plans to cut its roster of pilots down to 200, Schnedorf said.
Schnedorf noted that the pilots took "deep concessions" to keep the Oak Creek-based company afloat in 2003.
"I made more than $35,000 flying for the company in 1995, with better benefits," Schnedorf said.
The Midwest chapter of the pilots union will meet Thursday morning to discuss their options, Schnedorf said.
Midwest also is demanding that union flight attendants take pay cuts of 34 to 56 percent.
Midwest officials have said the cuts are needed to help the company avoid filing for Chapter 11 bankruptcy.
The majority owner of Midwest's Air Group Inc., the parent company of Midwest Airlines, is TPG Capital of Fort Worth, Texas. Northwest Airlines Corp. owns a 47-percent stake in the venture.
"With the resources these owners have, TPG and Northwest, if they want to get a deal done, they clearly have the ability to buy the time that is needed to do the right things," Schnedorf said.
Meanwhile, "for sale" signs are popping up like dandelions in front of condominiums throughout Oak Creek, as pilots and flight attendants prepare to lose their jobs or take pay cuts that would prevent them from staying in their homes.
Schnedorf said he spent his Fourth of July weekend painting his house, preparing it for sale.
"Pilots are doing several things, looking at how they can cope with this. They all are going through the same things with their homes, their wives and their children," Schnedorf said. "It's a tragic situation, the human impact that's going on."
The pain inflicted by soaring fuel costs is being felt throughout the airline industry.
Discount carrier AirTran Airways told its employees Monday that the company will cut 480 jobs, or more than 5 percent of its workforce, by Sept. 6.
Last week, American Airlines' parent company, AMR Corp., announced it plans to cut nearly 7,000 full-time employees, or 8 percent of its total staff, by the end of 2008. The reductions follow the airline's report that it may cut up to 900 flight attendant jobs.
Meanwhile, Orlando, Fla.-based AirTran's leadership team is keenly watching Midwest's tactical decisions less than a year after Midwest had rebuffed AirTran's hostile takeover bid.
"We'll keep a close eye on the competitive market and take a look at what might change with the Midwest pulldown," said AirTran spokeswoman Judy Graham-Weaver.

 

[ultrarunner]

The Midwest Airlines pilots do not plan to even vote on the troubled company's demands that would slash their pay by up to 65 percent, according to Jay Schnedorf, a captain and chairman of the Midwest unit of the Air Line Pilots Association (ALPA).
Schnedorf told SBT, "There will be no vote on their proposal. It's unacceptable on its face. We are planning a counter-proposal to present back to the company … We've told them (company officials) their demands are unacceptable."

Counter proposal??

Why bother. You get a raise next month. I think the only counter proposal would be something that would INCREASE the total compensation.

I can't imagine anyone on the list would support any counter proposal that would REDUCE any pay or benefits.

The furloughed group will have the majority in any vote based on the numbers. So that group has absolutely NO motivation to vote yes to anything. I suspect the MEC is quickly trying to mitigate the furlough numbers in an effort to have at least a possible majority still on property.

Very interesting to see what the MEC puts in front of it's members.

 

[propdog]

That looks ugly. It would be better for the pilots to burn the house down than take that kind of paycuts. Good luck to Midwest employees..

 

[radarlove]

I bet Midwest's management wishes they could turn back the clock on the Airtran acquisition. Oops.

 

[ultrarunner]

I bet Midwest's management wishes they could turn back the clock on the Airtran acquisition. Oops.

I don't know. If I had been MidEx senior management when TPG and NWA threw 17 bucks in CASH per share in front of me, I'd have taken the money. No brainer!

Airtran was a cash/airtran stock offer. Right now, Airtran is trading at less than a buck 70!

Cash is hand is always good. And 17 bucks a share was a MASSIVE premium for a MidEx share.

 

[maxblast72]

Unfortunately, Midwest management is just jumping on the bandwagon for 90 seat payrates already set by USAir and Jetblue E-190 payrates. $85/hr Captains and $40/hr First Officers is basically what USAir and Jetblue are paying their 90 seat pilots.

I think these 90 seat payrates are bad for anyone flying between 100 and 120 aircraft (like Airtran 717's and Northwest DC-9's). We are going to hear management complain for a long time how they can't compete with the current pay rates because these other guys are getting paid so little to fly 90 seaters.

 

[maxblast72]

I don't know. If I had been MidEx senior management when TPG and NWA threw 17 bucks in CASH per share in front of me, I'd have taken the money. No brainer!

Airtran was a cash/airtran stock offer. Right now, Airtran is trading at less than a buck 70!

Cash is hand is always good. And 17 bucks a share was a MASSIVE premium for a MidEx share.

For as much as Timmy H. sucks at running an airline profitably, he did do a great job protecting the investment of the MEH shareholder. $17 bucks a share was way more than any investor could ever have hoped for just a year or two ago.

 

[ultrarunner]

Yeah Max, TH was pushed into a corner on that one. Airtran's latest and greatest offer was not going to be extended. Once the offer expired, MEH shares would have adjusted back down to pre-offer levels, if not lower.

Had this occurred, a MidEx shareholder would have been staring at a 4 buck stock, at best, when the deal might have netted them 10 or 12 bucks.

So TH HAD to shop the airline. If he and the board had held out to go solo, there would have been an immediate call to oust him and his possie.

Selling out to TPG and NWA was a HUGE score for the shareholder. Yeah, the employees and company is heading down the crapper, but those are secondary responsibilities.

 

[RedRum]

For as much as Timmy H. sucks at running an airline profitably, he did do a great job protecting the investment of the MEH shareholder. $17 bucks a share was way more than any investor could ever have hoped for just a year or two ago.

DING DING DING! You got that one right. That seems to be the theme in all of this mess we call airlines these days.

Shareholder first, employees, daily operations and customers come in a distant second place! As long as the fat cats get paid.

We are in a bad mess and there is definitely a reason to be taking concessions at this point. But there needs to be snapback provisions in the event that oil retreats or the dollar strengthens...big if there.

Best of luck to the Midwest pilots. As an NWA pilot and possible future furlough fodder I hated to see what our management did to you guys. It is deplorable and frankly a little embarassing.

 

[SDF2BUF2MCO]

Pilots don't buy gas. Cutting a Captain's pay by $80 is not going to offset a 300% increase in fuel costs. Appears MidWest is about to have it's flying replaced by the regional guys.

Acutally it makes perfect sense. No different than our politicians, they hose everything up and then the taxpayers pay the tab. Perfect.

My cynical side thinks it is a smoke screen to lower pay even more since they aren't taking it out on the people responsible for the oil price increases.

 

[Dizel8]

"We are in a bad mess and there is definitely a reason to be taking concessions at this point."

I disagree, we have been taking concessions for how many years now? Enough have been given, either they make it with what they have, or the plan isn't working.

Besides, in the case of MEH management and what they are asking, that is not a concessions, that is extortion and highway robbery.

AAI has been working on a contract for 3+ years, have gotten nowhere fast, yet now management wants the pilots to fast track a concession, holding junior pilots as ransom.

The story for too many:
50%+ paycut,
Given up retirement
Lost workrules
More days away from home
Increased medical cost

What is left?

As I said, I personally feel enough has been given! Make the "plan" work or call it a day!

 

[likeitis]

MEC Update on Status of Negotiations

Today, your MEC chairman and vice chairman provided a response to management’s latest proposal.

Through its representatives from the Seabury Group, Midwest Airlines management is not bargaining with your leadership in good faith. The manner in which management’s representatives have responded to your leadership’s proposals and requests for information indicates that management has no intent to reach an agreement with ALPA outside the bank­ruptcy process. While management says otherwise, their actions and those of their representatives are inconsistent with achieving that goal.

Your ALPA leadership made a substantial proposal which included many elements management was seeking worth several millions of dollars with a guarantee that the deal could implement quickly; management has refused to engage on the basis of this proposal or attempt to address even one of the pilot group’s significant concerns. Management has maintained its unrealistic and irrational demands without even one cent of movement from their initial terms toward your leadership’s position for the aircraft we operate.

Management has refused to treat the pilot group fairly and equitably in comparison to other stakeholders including their own executives. Furthermore, management has continued to withhold certain information that is critically important to finalizing some of the mutu­ally important elements of your leadership’s proposal.

Despite the fact that management’s demands on its pilots are excessive and unrealistic and the fact that they rebuffed your union leadership’s offer to meet again next Monday, your leadership restated its desire to continue bargaining in good faith on the basis of ALPA’s proposal. While aware of the sentiment of the pilot group, your leadership will continue to maintain the high road and deal with management in a business-like approach in upholding their responsibility to protect the best interests of our pilot group regardless of what actions management takes.

 

[~~~^~~~]

Sounds like the MEC is doing good work and taking a reasonable stand.

 

[Colonel Savage]

Sounds like the MEC is doing good work and taking a reasonable stand.

Yes, and it's too bad Seabury, TPG and MEH management won't act responsibily and stand with them.

 

[Sedona16]

Unfortunately, Midwest management is just jumping on the bandwagon for 90 seat payrates already set by USAir and Jetblue E-190 payrates. $85/hr Captains and $40/hr First Officers is basically what USAir and Jetblue are paying their 90 seat pilots.

I think these 90 seat payrates are bad for anyone flying between 100 and 120 aircraft (like Airtran 717's and Northwest DC-9's). We are going to hear management complain for a long time how they can't compete with the current pay rates because these other guys are getting paid so little to fly 90 seaters.

And guess who set the low bar for the rates in this catagorie? You can thank a group of sellouts at skywest for the willingness to fly 99 seat airplanes for 50 seat rates a few years ago. JB set rates off these and so on and so fourth.

 

[Dizel8]

JB set rates off these

And trust me, many are not proud of that fact!

Recently the 190 at jetblue has seen a "raise", with the stated intent of 100K a year for an E-190 captain. This is based on flying 81hrs a month. Going into the real details is beyond my typing skills, two finger pecking and all, but this will not be the real value on a W-2 in this year, things being what they are.

I am not an MEH pilot, but IMHO, what the company is offering is a lump of coal in the stocking.

The recent crap going on in this industry should more than ever show, that we as pilots are all holding on to the short end of a long stick, and that we, the pilots, regardless of who we work for, are more alike than not. "Yeah, so maybe my penis is bigger than yours, but we are all in the same porno movie, so let's see if we cannot get some more money for our "prowess" "

 

[MINIME]

All pilot groups should tell managemnet to go pound sand when they come knocking for concessions. Even the analysts agree. They have consistently stated that the airlines should not expect employees to provide relief anymore. That door has already closed. They've taken enough and there's no more to give.

If an airline can't survive because of today's pilot salaries, then they got bigger problems than what's being portrayed. Part of that problem should be inept management. Hell, we should be petitioning them to resign their bonuses or resign their positions. Their pick.....

 

[FlyWolf]

FRIDAY, July 11, 2008, 3:59 p.m.
By Tom Daykin</B>


Midwest bankruptcy filing might be near

The corporate parent of Midwest Airlines appears headed toward a Chapter 11 bankruptcy filing, the head of the company's pilots union said today.

Jay Schnedorf, chairman of the Air Line Pilots Association Midwest Airlines chapter, reached that conclusion based on the company's response to the union's proposal on possible wage cuts.

In response, the company issued a statement saying it is "continuing to talk with the union despite claims to the contrary."

"Furthermore, we have been open and transparent in providing information, financial and otherwise, and believe strongly that our proposals are fair and equitable," Midwest Air spokesman Michael Brophy said, in a statement.

The statement didn't respond to Schnedorf's comments about a possible bankruptcy filing.

"An important component of good faith bargaining, in our view, is not negotiating in public," the statement said.

Schnedorf said the union made a proposal that involved wage and benefit concessions totaling "several millions of dollars." The company's response was to "not move one penny toward us at all," he said.

"That's not indicative of a company that's trying to avoid the bankruptcy process," Schnedorf said.

A Chapter 11 filing would give Midwest Air greater power to negotiate new labor contracts with its union flight crews, and craft new terms with its lenders and major creditors. Midwest Airlines and its regional affiliate, Midwest Connect, would continue to operate.

 

[jetflier]

I agree that this could be a "smoke-screen"....to obtain a justice department approval for retaining the control of Midwest.

Management at NWA/TPG may be purposely driving Midwest Airlines into a CH11 situation where in just a few short months, DAL/NWA will be seeking formal approval for the merger.

NWA has said repeatedly that it wants to protect the "heartland", and MKE is a large piece.

IMHO, by driving Midwest into CH11, the DOJ would be willing to allow DAL to save the airline and absorb its operations...

This just smells like a corrupt management driven situation that really doesn't make much sense...

 

[Fly4hire]

NWA has said repeatedly that it wants to protect the "heartland", and MKE is a large piece.

IMHO, by driving Midwest into CH11, the DOJ would be willing to allow DAL to save the airline and absorb its operations...

I'm sure there is no intent to allow AAI back in with a Midwest Ch11

I'm guessing that the strategy is a Ch11 to a Ch7 and simply take only the assets/crews they want and redeploy some DAL/NWA assets to MKE. A Ch7 liquidation makes the integration of remaining staff fall outside of ALPA merger policy.