Who's the other 3 suitors tring to buy Midwest?

[CitationLover]

I don't think Midwest pilots would appreciate the same "preferential interviews" deal that SWA gave the ATA pilots...

they didn't buy the company then they bought what.... gate space and loaned them money? i doubt that is what is going to happen here.

odds are a local private interest or air tran for this deal.

 

[Lear70]

ALPA to ALPA I doubt would be a "staple" merger. That being said, we are simply the summer relief Doug needs at NWA in terms of staffing.

This wouldn't get done in time to solve their staffing needs; I think that's a flawed argument.

His negotiated price would be higher than AirTran's in all likelihood so the shareholders would get more money. Why would they riot if they sold their shares?

If he bought ALL of them outright with no 50% or similar share issue plus cash? Sure, no problem.

The reason the stock price is so high is because AAI's stock price has been decently stable and sell-able as well so, if a shareholder wanted to dump their stock after the purchase, they'd see a much larger combined cash deal when they were done.

I don't think the shares in any deal with that BoD member would remain as valuable. Just my personal opinion.

You just defined restricted cash. Midwest has unrestricted cash also. Besides a suitable buyer will have the cash on hand to do what you describe (ie AirTran, NWA, private groups), they can use Midwest's unrestricted cash to do whatever they want since they own it.

Not really. A "suitable buyer", including AAI, will have to borrow a large portion of the purchase price. There's not as much "free cash" in this deal as some people have stated, unless you liquidated the airline.

SWA probably a staple. NWA, I doubt again due to ALPA to ALPA merger policy. AAA is complaining regarding their unfair treatment, but no active ee got stapled in their treatment under Nicolau.

ALPA merger policy would, in all likelihood, recognize the career earnings potential of Midwest pilots moving to Northwest as a large "windfall" in and of itself. I think you're deluding yourself to where you'd fall in a NWA acquisition; take a hard, close look at previous NWA integrations and check back in when you've read the history. It's not pretty.

That being said, I think this is all a move to drive the price up and see if there are some truly serious local interests interested in putting their money where their mouth is and support the local company.

Probably.

You keep saying "failed business model" Lear70, but they have shown profits as of late (small as they are). While it may not be as successful or as explosively grown as airtran, doesn't mean it's failed. Is NWA, Delta, Continental (2x), USAirways (2x), America West, United failures as they used the taxpayer and we didn't? Obviously there is some value in this "failed business model" as people are lining up to take a look.

The only reason Midwest has shown profits is through accounting tricks such as accounting NOW for future fuel hedges. Didn't work so well this quarter, either.

On a pure net profit basis, excluding special accounting items, Midwest hasn't been successful and this is getting even worse now that the Legacies are leaner and meaner.

I don't believe Midwest is in danger of going out of business tomorrow as some people claimed with UAir, but I don't believe they can successfully compete long-term in this market without a major change of business strategy.

p.s. RJ's aren't it. That's just a bad idea with anything smaller than 90-seaters.

 

[russtgol]

Lets see a 100% cash purchase or $9 dollars and Airtran stock... If I was a stock holder I would want the cash... Money talks and they can invest that money in what ever they want... You think these hedge funds care what either airlines business strategy is.. There just looking for a quick buck... I bet you dollars to doughnuts they will take this thing private... Timmy has too many friends...

 

[CitationLover]

This wouldn't get done in time to solve their staffing needs; I think that's a flawed argument.

it was a joke.

If he bought ALL of them outright with no 50% or similar share issue plus cash? Sure, no problem.

The reason the stock price is so high is because AAI's stock price has been decently stable and sell-able as well so, if a shareholder wanted to dump their stock after the purchase, they'd see a much larger combined cash deal when they were done.

I don't think the shares in any deal with that BoD member would remain as valuable. Just my personal opinion.

decently stable? it's been going down and down and down since the hostile takeover has started. it's near a 52 week low. i don't think the market likes this merger.

Not really. A "suitable buyer", including AAI, will have to borrow a large portion of the purchase price. There's not as much "free cash" in this deal as some people have stated, unless you liquidated the airline.

a private buyer will pay cash, AAI's price of the deal ($389 million) isn't a lot of money for private investor funds.

ALPA merger policy would, in all likelihood, recognize the career earnings potential of Midwest pilots moving to Northwest as a large "windfall" in and of itself. I think you're deluding yourself to where you'd fall in a NWA acquisition; take a hard, close look at previous NWA integrations and check back in when you've read the history. It's not pretty.

i know all about red/green books, etc. windfall is a bit of a stretch, imho, especially with their current contract as it is now. if i had to choose, airtran is a better option than nwa imho.

The only reason Midwest has shown profits is through accounting tricks such as accounting NOW for future fuel hedges. Didn't work so well this quarter, either.

you take 1Q and extrapolate that to the entire history? cmon.

On a pure net profit basis, excluding special accounting items, Midwest hasn't been successful and this is getting even worse now that the Legacies are leaner and meaner.

I don't believe Midwest is in danger of going out of business tomorrow as some people claimed with UAir, but I don't believe they can successfully compete long-term in this market without a major change of business strategy.

p.s. RJ's aren't it. That's just a bad idea with anything smaller than 90-seaters.

you're right RJ's aren't it. they were the cheapest option available now unfortunately.

if you think it's all accounting gimicks, then believe that. the buying parties obviously see more than that. sure the majors are leaner and meaner, but they don't compete with us on most of our routes out of MKE, MCI. the majors attention these days isn't domestic, but rather going over the oceans.

 

[OCP]

Skywest

 

[CitationLover]

Skywest

that's funny. i thought it was frontier, oh no that's republic.

yup those non union mormons want a union airline brought on board.

 

[Lear70]

it was a joke.

Oh, OK... sorry. Put a smiley or winky face on it and I'd probably get it. I'm slow on the uptake.

decently stable? it's been going down and down and down since the hostile takeover has started. it's near a 52 week low. i don't think the market likes this merger.

If you don't, wait and see what happens if the Board eventually says NO to everyone and AAI pulls the offer and goes after Frontier or someone else.

a private buyer will pay cash, AAI's price of the deal ($389 million) isn't a lot of money for private investor funds.

That's true.

i know all about red/green books, etc. windfall is a bit of a stretch, imho, especially with their current contract as it is now. if i had to choose, airtran is a better option than nwa imho.

I agree that it wouldn't be all THAT; I'm just playing Devil's Advocate for how the NWA bunch would likely look at it...

you take 1Q and extrapolate that to the entire history? cmon.

No, just saying that things are getting progressively worse for Midwest and something's going to have to change.

I'd still personally rather go after Frontier in a friendly merger and start flying Canada, Mexico, and the Caribbean; I think the route combination is simply more advantageous, but I'm just a line guy, what do I know.

 

[russtgol]

Hey Skywest bought ASA and there pilots are union... Skywest has alot of cash sitting in the bank and it would'nt surprise me one bit if they add Midwest to the "Skywest Inc"

 

[PHXFLYR]

It's not.

MKE has always been steady, but never a huge source of revenue from originating passengers. It just makes a good launching point for mid-west cities and a good connection point for east-west flow.

The 717's don't do anyone any good except that AirTran is the only other operator for them. We have the infrastructure set up for them - no one else does.

The only other "serious" offers are likely coming from Northwest just to protect the territory. If they got it, they'd likely reduce the company to next to nothing in a few years and staple the employees to the bottom of their seniority list.

The other offer is likely coming from the one Board member who has been hinting at a purchase of the airline to keep it like it is and he's likely going to run into financing problems. He certainly doesn't have the money to go it alone without bankrupting himself and the business plan as it stands won't work. I find it difficult to believe the board would buy off on this and the shareholders would riot as the stock price plummeted.

The 3rd offer is anyone's best guess. Could be someone just trying to turf protect (Southwest maybe). jetBlue doesn't have the cash nor are they in a position to obtain financing at rates that would allow them to have any kind of realistic profit margin, plus adding a 3rd aircraft to their fleet would be rather foolish.

Everyone likes to say that whoever "buys" Midwest would be able to use their cash on hand to finance the deal. That's not accurate. You have to have cash on hand to run your daily operations and keep as a contingency. You can't rob the company's bank accounts and continue to operate the airline. You'd have to finance a large portion of it, or have the cash yourself on hand, period.

Depends who gets them. AirTran, you'll probably get a slotted percentage-based seniority integration with fences to keep career expectations, not to mention minimize training expenses. Anyone else? NWA and SWA have a history of stapling anyone they buy...

So why do you think if there is a NWA-Midwest mergerthe Midwest pilots would get stapled to the bottopm of the NWA senority list? Seems there is a better chance of that occuring should Air Tran prevail.No?


PHXFLYR

 

[crashpad]

This story was a 'plant' by Midwest to get more money from Airtran....A little late for that, but it does reveal that the board has approved a sale. Now it's just a matter of time...very little time. The campaign to "save the cookie" will become "I'm hungry. Give me the cookie..chomp...chomp...burp!!!"