Northwest writes off Midwest investment

[MarineGrunt]

Is it true that as MEH flights are being drawn down they are being replaced simultaneously with additional or new NWA flights?

I may be wrong, but isn't NW supposed to start flying MKE-LAX sometime this month?

 

[FlyWolf]

I think Sept 9th if I am not mistaken.

 

[CEO silly sap]

So is there a get together tomorrow or what?

 

[Ty Webb]

You gotta love how a supposedly "Knowledgeable" airline reporter (I know, I know) would compare a certain month with the previous month, instead of the more logical "same month, previous year". :blush:

Kind of a shame that "experts" don't require some sort of Industry Certification, Knowledge, Training, or even Fact-checking. :erm:

Ty

 

[FlyWolf]

So is there a get together tomorrow or what?

There was, and it was a great success.

 

[~~~^~~~]

NWA is essentially telling its shareholders to not only forget about any return on NWA's $213 million, but that the shareholders should think of the $213 million NWA paid for 47% of Midwest as money that was taken out back and lit on fire. Texas Pacific Group has plenty of cash, but they're not likely going to continue pouring money into Midwest if they can kill it and by doing so further solidify NWA/DL's dominance (read: pricing power) in the upper midwest. The $250 million TPG paid for its controlling share of Midwest might well be off-set by TPG being given a preferred shares-type deal for investing in a merged DL/NW.

Good analysis. In retrospect, they should have saved their money and congratulated AirTran on their acquisition. Having to carry MidEx would have had a serious negative effect on AAI's liquidity. My guess is that 300 million at least would be gone from the 540 million war chest. Even more if this turned out to be "revenue sensitive." (and who knows, AirTran might have been able to make it work, and for Delta's sake they would be focused somewhere other than Atlanta)

Serves NWA/TPG right for acting in an anticompetitive fashion to begin with. I have never understood the type of management thinking that pays real money for a product not coming to market. If the airline industry was regulated by the FTC instead of the DOJ, things like this would not happen and, surprise, the industry would be saved from some of its own dumbest ideas.

Makes you wonder how smart Republic Airlines Holdings is to dump $80 million in? Also makes you wonder why NWA/TPG did not force a friendly BK to gain DIP rights.

If NWA/DAL keeps their hands in the MidEx operation, I expect MidEx to become a quasi~Delta Connection carrier that serves as a code share end run around Delta's scope agreement with their pilots. Like all the other DCI carriers revenues and seat miles will be optimized. Passengers don't care what name is on the side of the airplane (MidEx is a good exception to the rule, certainly) and the DOJ stopped being relevant a decade ago.

Good luck & condolences to anyone getting furloughed. MidEx has an excellent reputation should you decide to move on.