rumors from both NWA and DAL about 717

[CopilotDoug]

Apparently there is interest in a A319/320 with the Pratt GTF's. AirBus is already started on the certification and a re-fit will probably be offered to operators of the aircraft. I'm not sure how long it would take to pay off the engine swap, looks like the fuel savings would be about $1.4 to $2.0 million per airframe per year if they hit the 15% number relative to a PW6000.

In my crazy way of thinking, why not hang a pair on the back of a DC9-50, or MD88?

AA was looking at re-engining their MD-80's before oil prices went through the roof. Their bean counters determined that it wouldn't be economically feasible given the then current prices of oil. Someone will make alot of money by purchasing a pool of these GTF's and leasing them to the Airbus operators.

 

[General Lee]

Just read that Midwest will be dumping 16 717s back to Boeing, and then getting RAH E170s to replace them (12), and eventually Midwest pilots flying them (within 1.5 years). Interesting. Maybe that could be pat of this DL 717 rumor?


Bye Bye--General Lee

 

[PeanuckleCRJ]

Linky, General?

 

[General Lee]

Linky, General?

To: All Midwest and Skyway Employees
Date: September 3, 2008
From: T.E. Hoeksema
Subject: Restructuring Progress

I am pleased to announce significant progress in our restructuring plan and
$60 million in additional financing, including commitments from TPG Capital
and Republic Airways Holdings, an Indianapolis-based airline holding
company.

A portion -- $40 million -- of the additional financing has already been
funded, with an additional $20 million to be funded upon completion of
certain milestones in our voluntary restructuring plan. This financing
provides us the best opportunity to preserve what our customers have always
valued from our airline, while positioning us for a return to sustained
profitability and future growth. Under this agreement, Northwest Airlines
will continue its codeshare and with us.

As part of the financing agreement, Republic has entered into an airline
services agreement with Midwest to operate 12 Embraer 170 jets under the
Midwest Connect brand. Republic will operate the 76-seat Embraer 170s until
we can transition the fleet under our own certificate. The Embraer 170
service will be introduced into Midwest Connect's schedule throughout the
fall, beginning October 1.

I am also pleased to tell you that we have reached an agreement in
principle with Boeing Capital Corporation on renegotiated leases for our
fleet of Boeing 717s. Under the terms of the agreement, we will continue to
fly nine of the original 25 Boeing 717s we had under lease for our mainline
fleet, returning 16 to Boeing this fall.

We plan to continue negotiating with the unions representing our pilots and
flight attendants on concessions necessary to align our labor costs to the
marketplace, in order to meet one of the final goals of our restructuring
plan. The airline services agreement with Republic will result in
additional furloughs for Midwest pilots, flight attendants and maintenance
staff until we can operate the Embraer 170 fleet on our own FAA operating
certificate. We expect this process, which includes training for its flight
crews and maintenance staff, will take eight months to a year.

I recognize the difficulty this presents to our flight crews and
maintenance staff, who will experience additional temporary furloughs. We
informed union leadership of our plan and advised them that this was the
best option to keep our airline viable and that in the best interests of
our employees, customers and communities, we need them to come to the table
on cost reductions so we can obtain certification and bring the jobs back
to Midwest.

As you know, our restructuring has focused on a strategy to serve our core
business markets, cost reductions necessary to address high jet fuel prices
and a soft economy, and revenue enhancement actions. Revenue enhancement
actions that are part of our restructuring include the introduction of
Midwest Class seating on our Boeing 717 fleet, which was announced last
week, as well as a $15 fee for the first checked bag and an increase in the
second checked bag fee from $20 to $25. Those fees will apply to tickets
purchased on or after September 4 for travel October 21 and beyond.

I'd like to emphasize that our commitment to customer service and focus on
nonstop flights to key business markets will continue. Operating a more
fuel-efficient, flexible mix of aircraft makes good economic sense in this
new energy environment. We have had to make
difficult decisions as part this restructuring that have resulted in change
for our airline. But our strategy of offering nonstop service to key
business markets and giving our customers what they have always valued
about the Midwest brand -- what we were built on -- will not change.

Please join me in welcoming Republic Airways as a new partner with TPG in
Midwest Airlines. Thank you.


Bye Bye--General Lee

 

[FlyWolf]

TV9Driver, thanks, I still think we would have been much better with Airtran than NWA/TPG.

Heavy Set, even though Midwest is furloughing it is NOT out of seniority, your info is wrong.

My initial post was, Midwest is being re-aligned, I didn't say anything about Midwest continuing to fly 717.

Peace and good luck to all.

I hope you know what I meant now.

 

[~~~^~~~]

INDIANAPOLIS--(BUSINESS WIRE)--Sept. 3, 2008--Republic Airways Holdings (NASDAQ: RJET), announced today that its Republic Airlines subsidiary has signed an agreement with Midwest Airlines to provide 12, 76-seat Embraer E170 jets operating as Midwest Connect with initial service beginning October 1, 2008.

"We are very pleased to partner with the Midwest Airlines team and look forward to a mutually beneficial relationship," said Bryan Bedford, Chairman, President and CEO of Republic Airways.

"Republic is a partner that can help position us for a return to sustained profitability and future growth, deploying an aircraft that is fuel efficient, state of the art and strategic for this new energy environment for the U.S. airline industry," said Timothy E. Hoeksema, Midwest Airlines chairman and chief executive officer. "We look forward to working with the Republic team in this new partnership."

Key commercial terms of the agreement include:
1. Under the Airline Service Agreement ("ASA"), Midwest will purchase all capacity at predetermined rates and will directly pay or reimburse Republic for industry standard pass-through costs.
2. The first aircraft will be placed into service on October 1, 2008 and the last aircraft on November 15, 2008.
3. The agreement has a term of ten years. However, at Midwest's option, and at any time prior to June 1, 2010, Midwest can elect to convert the ASA into a long term aircraft lease. The 12 E170's would be leased from Republic for the remaining duration of the ASA and operated on the Midwest Airlines operating certificate.
4. All fuel will be purchased directly by Midwest and will not be charged back to Republic.
5. Republic made a one year term loan to Midwest in the amount of $15.0 million, with an additional loan commitment of $10.0 million, based on the achievement of certain milestones.

 

[General Lee]

INDIANAPOLIS--(BUSINESS WIRE)--Sept. 3, 2008--Republic Airways Holdings (NASDAQ: RJET), announced today that its Republic Airlines subsidiary has signed an agreement with Midwest Airlines to provide 12, 76-seat Embraer E170 jets operating as Midwest Connect with initial service beginning October 1, 2008.

"We are very pleased to partner with the Midwest Airlines team and look forward to a mutually beneficial relationship," said Bryan Bedford, Chairman, President and CEO of Republic Airways.

"Republic is a partner that can help position us for a return to sustained profitability and future growth, deploying an aircraft that is fuel efficient, state of the art and strategic for this new energy environment for the U.S. airline industry," said Timothy E. Hoeksema, Midwest Airlines chairman and chief executive officer. "We look forward to working with the Republic team in this new partnership."

Key commercial terms of the agreement include:
1. Under the Airline Service Agreement ("ASA"), Midwest will purchase all capacity at predetermined rates and will directly pay or reimburse Republic for industry standard pass-through costs.
2. The first aircraft will be placed into service on October 1, 2008 and the last aircraft on November 15, 2008.
3. The agreement has a term of ten years. However, at Midwest's option, and at any time prior to June 1, 2010, Midwest can elect to convert the ASA into a long term aircraft lease. The 12 E170's would be leased from Republic for the remaining duration of the ASA and operated on the Midwest Airlines operating certificate.
4. All fuel will be purchased directly by Midwest and will not be charged back to Republic.
5. Republic made a one year term loan to Midwest in the amount of $15.0 million, with an additional loan commitment of $10.0 million, based on the achievement of certain milestones.

Midwest needed a loan, and NWA and TPG probably wouldn't give anymore. MKE isn't a huge a market, and loads out of MKE might only fill E170s on certain business routes. They are parking 16 717s, and bringing on 12 E170s. They don't seem like too much of a threat, and Airtran cannot afford to buy them now. Sounds like NWA got what they wanted.


Bye Bye--General Lee