n917me
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Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 9:58 am

Well, tomorrow is the 16th and the deadline to tender shares. Joe Leonard has said numerous times that this is the final offer for YX. YX stock closed up and has been up all week, meanwhile FL stock has stayed the same and/declined. So, with that being said, I think FL will extend their offer by 30 days .. again!

What is anyone elses take.

Not looking to start a FL vs YX thread, as we all know how heated they get.
 
ryanrap1
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 10:05 am

I THINK Midwest will definetly REJECT THE DEAL!
 
sideflare75
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 10:37 am

Quoting Ryanrap1 (Reply 1):
I THINK Midwest will definetly REJECT THE DEAL!

They already did.

I'll say the deal gets extended until June 21st and they have 21% tendered.
 
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knope2001
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 10:38 am

An extension seems likely so that if/when FL gets their MEH-board-candidates elected that there is an offer on the table. That's of course not a done deal, but the meeting is about a month out.

What does seem odd to me is that in the past the offers were extended 1-2 days ahead of expiration, and today FL was silent. The only word out of them todway was their $29 fare sale for the month of June. Several markets, including MDW-ATL, for $29 if you hit the right flights.
 
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knope2001
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 10:48 am

Thinking about it sooner, here's what I suspect will happen:

--FL will let their offer expire

--The MEH stock will drop becuase the offer has inflated it

--FL is banking the stock will drop a lot

--Shortly before the annual meeting FL will swoop in with an offer higher than MEH stock is at that point

--No matter if MEH stock drops 5% or 35%, FL will hoot and holler for shareholders to get out while they can
 
N911YX
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 11:47 am

Shareholders (not short-term speculators) have already voted with their shares. It appears to me that the tally is somewhat scant in the favor of Air Tran. Scant is a polite term for there's egg all over your face sir. Now, can we just all get along and resume the program already in progress?
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2175301
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 11:48 am

I suspect the answer will be no, no, and no. No matter how many shares are tendered or the offered price.

A little known fact is that the board is responsible to ensure that all the "Stakeholders" interest are protected. This is much more involved than just insuring that the Shareholders interest are protected or met. The board of directors must consider the impact on the employees and customers of Midwest Airline.

I do not know how unique this legal requirement is; but Midwest Airlines is incorporated in Wisconsin where such protection can be invoked - and the Midwest Articles of Incorporation direct that the Stakeholders be considered.

Here is a link to an article that explains a bit about this.

http://iblsjournal.typepad.com/illin...w_soc/2007/02/freshlybaked_co.html

Should AirTran succeed in getting one of their chosen members elected to the Midwest Board - then that person is required to ensure that the Stakeholder interest are considered (and not just the Shareholders). Given the staggered terms of board members it would also take a number of years for a majority of board members to be replaced.

In my opinion - Midwest has built a nice little niche business based on business class travel in the Midwest US. It may never be hugely prosperous - but it is steady and they are doing no worse than many airlines (and better than some). The customer base is very different than Air-Tran - and I doubt they will ever mix to any degree.

Surveys produced last week indicate that if Air-Tran does acquire Midwest that a good chunk of the current customers would not consider staying - and would leave (and links to those surveys were previously posted on another thread).

Those customers must be considered as Stakeholders of the company. How does this merger protect their rights?

Should Air-Tran get enough shares tendered or purchases enough - the Midwest Board will almost certainly activate the "Poison Pill" provision which would significantly dilute those shares to minimal value. Every article I have read indicates that if the Poison Pill provision is activated that Air-Tran will have no chance.

In my opinion their only real chance is if they can get a super-majority of shares tendered - and I don't think that will happen.

Perry (New here but have been following the forum for a couple of weeks).
 
SkyexRamper
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 1:49 pm

On other YX thought...it's most likely a go for all 25 SkyWest CRJs by the end of the year.
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mke717spotter
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RE: Midwest/AirTran.. Any Guesses?

Wed May 16, 2007 1:58 pm

Wouldn't it make sense that if most shareholders aren't tendering their shares that most of them would vote against the three people FL has nominated for the YX board? Or is that not how it works?

Quoting SkyexRamper (Reply 7):
it's most likely a go for all 25 SkyWest CRJs by the end of the year.

That's good to hear. Its been a while now since YX has announced anything new so hopefully something is in the works.
Will you watch the Cleveland Browns and the Detroit Lions on Sunday? Only if coach Eric Mangini resigned after a loss.
 
SkyexRamper
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 12:09 am

Quoting Mke717spotter (Reply 8):
Wouldn't it make sense that if most shareholders aren't tendering their shares that most of them would vote against the three people FL has nominated for the YX board? Or is that not how it works?

Heartland Advisors sold off a huge chunk of Midwest stock. Over the course of a year, April 06-April 07, they went from 1.2 Million shares down to 592,100 as of the end of April 2007.
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airtran737
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 12:18 am

Quoting N917me (Thread starter):
What is anyone elses take

I think that FL will let the offer expire, and walk away. When YX stock takes a dump, FL will say I told you so, and try to buy in again at a lesser value. I sold my YX shares, so I could really give a crap what happens. If the merger goes through it will just add more places that I can non-rev to, and will make commuting much easier.
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
Corsair2
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 2:20 am

What is AirTran's plan B if the takeover for Midwest never happens? Is there still a chance that they could dump their 737 orders? Up to this point they have put all their eggs in one basket.
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deltadawg
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 2:29 am

Quoting Corsair2 (Reply 11):
Is there still a chance that they could dump their 737 orders? Up to this point they have put all their eggs in one basket.

Why would they dump their orders? They have delayed a few - but even the ones delayed were only until the next year. FL is expanding at points that make sense and are deemed to be profitable such as the new round of LAS routes. The loss of the YX deal won't mean that FL won't keep expanding it just means that they won't expand as fast and have routes to put thenew 73G's on right away .
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airtran737700
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 2:41 am

First off, let me just say I hope this MERGER happens. If it doesn't I bet that we will see a whole bunch of new routes for airtran in MKE. If Airtran was willing to spend hundreds of millions of dollars on a Midwest merger, (and it does't happen) I think they will not think twice about loosing a couple of million dollars in a short term loss to flood the MKE market and hurt Midwest. Just think, if midwest goes belly up in 2 years because of an "increse" in competition there is going to be a fairly large fleet of 717's and a big market gap in MKE for the taking.

LET THE WAR BEGIN
 
SkyexRamper
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 2:48 am

Quoting AIRTRAN737700 (Reply 13):
Just think, if midwest goes belly up in 2 years because of an "increse" in competition there is going to be a fairly large fleet of 717's and a big market gap in MKE for the taking.

How does will FL successfully put a dent into Midwest if they only have 2 gates here in MKE and at times it seems like only enough people to run 1 gate at a time. With the weather yesterday they were running close on a few flights, one would be just out the gate as the other was coming off the runway. Not to mention, if NWA couldn't bring down Midwest, well then FL has no chance.
Good Luck to all Skyway Pilots! It's been great working with you!
 
DAYflyer
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 2:55 am

The offer will be rejected and FL will pummel Midwest in MCI and MWK with more and more flights, with all of those bright, shiny new 737's.
One Nation Under God
 
n917me
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 3:00 am

Quoting AIRTRAN737700 (Reply 13):
First off, let me just say I hope this MERGER happens. If it doesn't I bet that we will see a whole bunch of new routes for airtran in MKE. If Airtran was willing to spend hundreds of millions of dollars on a Midwest merger, (and it does't happen) I think they will not think twice about loosing a couple of million dollars in a short term loss to flood the MKE market and hurt Midwest. Just think, if midwest goes belly up in 2 years because of an "increse" in competition there is going to be a fairly large fleet of 717's and a big market gap in MKE for the taking.

LET THE WAR BEGIN

As I said before, I really don't want to start a YX/

Quoting DAYflyer (Reply 15):
The offer will be rejected and FL will pummel Midwest in MCI and MWK with more and more flights, with all of those bright, shiny new 737's.

Please see Skyexrampers response above.... If NW has tried numerous times to bring YX down and has failed each time, what makes FL think they will be successful?
 
airtran737700
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 3:35 am

N917ME & SKYEXRAMPERS

I do agree that Northwest did try to put the nails in Midwest's coffin, but Airtran is very different from Northwest. Airtran has a great route structure, new planes, low operating cost, should I continue? OK, I will Airtran has a managemnt that wants to see this merger happen, and if it doesn't I don't think they will think twice about putting nails in Midwest's coffin. Airtran has gained alot of press in the MKE and MCI areas (I admit, good and bad), but many people that did not know the airtran name before the merger, now know the Airtran name. MKE loads are great, and summer hasn't even started yet.


BREAK OUT THE TEAL AND WHITE AIRCRAFT PAINT....THERE IS A WHOLE LOT OF 717'S THAT ARE GOING TO NEED A NEW PAINT JOB.
 
airtran737
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 3:37 am

Quoting Airtran737700 (Reply 17):
BREAK OUT THE TEAL AND WHITE AIRCRAFT PAINT....THERE IS A WHOLE LOT OF 717'S THAT ARE GOING TO NEED A NEW PAINT JOB.

You're way off, and quite arrogant. YX has rejected the buyout, and AirTran will announce their intentions tomorrow.
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
quickmover
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 3:42 am

If they have a big enough portion of the stock to ensure electing the FL directors, I hope they sit down and iron out a deal. It's a shame not being able to take advantage of peak season demand, while they are tearing each other down in the press.

If the deal is inevitable, get on with it.
 
Mainland
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 3:52 am

If there's no word from AirTran later today that does not mean they've let the tender lapse and expire. AirTran has until 9am tomorrow to announce any extension. I think AirTran will take as much time as they can and make an announcement early tomorrow, but we shall see.

Also, AirTran's appeal regarding the shareholder list is set to be heard today. (Actually, as I'm typing this it seems) Might see a PR about this along with any action on the tender offer.

http://www.courts.state.ny.us/courts...alendar/07calendars/June/may16.pdf
You don't need a passport to know what state you're in...
 
jibblets
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 4:46 am

Quoting AIRTRAN737700 (Reply 13):
If Airtran was willing to spend hundreds of millions of dollars on a Midwest merger

Except that AirTran's offer is almost entirely funded by Midwest's cash and AAI stock. AirTran is not proposing to spend hundreds of millions of dollars of its own money. It prefers to spend Midwest's cash and dilute the value of its stockholders shares in the company.
 
SkyexRamper
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 5:08 am

Quoting Airtran737700 (Reply 17):
but Airtran is very different from Northwest. Airtran has a great route structure, new planes, low operating cost, should I continue?

mmmm...what, that all 99% of FL destinations you have to connect through ATL. Where as NWA has multiple daily flights to MSP, DTW and MEM. Also many of NWA's planes are owned out right, especially their DC-9s. So please do continue.

Quoting Airtran737700 (Reply 17):
MKE loads are great, and summer hasn't even started yet.

I'm sure the loads are good, because well, direct flights to MKE are less than a dozen per day. Where as Midwest flights have been very full or sold out for the last few weeks and they run MANY flights direct to MKE daily!

Quoting AirTran737 (Reply 18):
You're way off, and quite arrogant.

        

Old Man Timmy is the only one who will attempt to run Midwest into the ground over the next 10 years.

[Edited 2007-05-16 22:11:19]
Good Luck to all Skyway Pilots! It's been great working with you!
 
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northwestEWR
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 5:16 am

Quoting SkyexRamper (Reply 22):
I'm sure the loads are good, because well, direct flights to MKE are less than a dozen per day. Where as Midwest flights have been very full or sold out for the last few weeks and they run MANY flights direct to MKE daily!

You're not kidding about them being full ! I could barely get a seat at the end of May and had to pay quite a premium to fly YX over CO.
Northwest Airlines - Now You're Flying Smart
 
Cubsrule
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 6:04 am

Quoting Airtran737700 (Reply 17):
Airtran has a great route structure, new planes, low operating cost, should I continue?

An interesting point. Though NW has a much higher CASM than FL, NW also enjoys a greater RASM premium over CASM than does FL; NW's RASM in calendar 2006 was $0.92 higher than CASM and FL's was only $0.26. Bear in mind too that NW flies more ASMs than does FL (about 2.5 times as many), so the same premium would put more cash in the bank for NW.

I'm also not sure how you can assert that FL has a great route structure in the context of this argument. NW hit all the major business markets, and quite a few small ones like STL as well. And yet they failed. Why sould FL be different?
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JBo
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 6:30 am

Chalk me up for being in favor of this going away.

No one knows for sure what will become of YX in the future. They're certainly looking to grow, and for all we know, it could become very successful for them. It could also tank. No one knows.

If AirTran wanted Midwest, they should have come in a few years ago when Midwest was near bottom. Midwest is on its way up, and not going anywhere anytime soon.

If another airline offered a merger to Midwest that I thought would truly be a realistic overall benefit to the company in the long term, I would support it.

AirTran's offer does not project a realistic overall benefit in the long term. The regional program would likely be phased out (or significantly reduced to 70-seaters operating only the larger cities).

Perhaps the most disappointing thing about all of this merger talk over the past several months is the tone and substance of posts made by the merger supporters, many of whom post their support in an arrogant manner that comes off as though the only reason they want the merger to happen is to see Midwest go away. I'm not sure what Midwest ever did to these people, but it's never been constructive to this merger debate.

However, there have been those who have stood at the other side of demeanor during this, regardless of which side of the issue they are on, who have kept their heads cool and provided meaningful discussion, debate, and analysis of this prospect. That's how it should be. Respectful.

But I digress. Tomorrow is yet another day, and we shall see where things stand. Will the plan continue? Will it be over? What'll happen? No one knows. I just hope that the more arrogant people on this issue will keep their silence unless they have something constructive to contribute.

G'day,
~J
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N911YX
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 8:24 am

Air Tran doesn't need Midwest to establish itself in MKE or MCI. With all of the on-hold 73s Air Tran could build itself a nice hub operation in either city. So why doesn't it do just that? Because it's Midwest's cash they're after and need badly. It's Midwest cash that will float the merger, not Air Tran's. With all of those 73s on hold what would Air Tran do with 25 more 717s? Takes cash to fuel those planes and to run them. That cash of Midwest's will last how long in Air Tran's coffers? Not long.
The airline biz needs a Quantum Physic
 
2175301
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 10:06 am

"Quoting AIRTRAN737700 (Reply 13):
Just think, if midwest goes belly up in 2 years because of an "increse" in competition there is going to be a fairly large fleet of 717's and a big market gap in MKE for the taking"

Actually, I believe you miss a very key point... W h a t.. C o m p i t i t i o n??

Midwest does not compete in the low priced airline ticket market. The vast majority of its customers are not interested in flying on an AirTran flight - and won't.

Thus, AirTran can run all the flights it wants in Milwaukee, and might even run full flights and be very profitable at it - and not affect Midwest at all.

People who fly Midwest - like I am planning on shortly - do so because of service and not because of price (and I can't even eat any of those cookies due to allergies).

The best care in the air. That is what Midwest sells - and that is what it's customers want and are willing to pay for. In my opinion that is also why AirTran will not succeed with its merger plans as they are not in the same market at all.

I have followed the claims about how many low priced plan-loads that AirTran will fly from Milwaukee. How they will pull lots of people from northern Illinois. I don't see it happening. The people in Illinois tend to head for O'Hare or Midway.
 
quickmover
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 1:14 pm

57%

This Just Off The Wire From WSJ...

AirTran Bid Wins Key Support
By Paulo Prada
Word Count: 313 | Companies Featured in This Article: AirTran Holdings, Midwest Air Group
AirTran Holdings Inc. is expected to announce that holders of almost 57% of the shares of Midwest Air Group Inc. have agreed to sell their stock under AirTran's $389 million offer to acquire the Milwaukee-based airline, according to people familiar with AirTran's plans.

Because the support represents a shift in favor of its longstanding effort to purchase Midwest despite opposition from the rival ...

• THE FULL WSJ.com ARTICLE IS ONLY AVAILABLE TO SUBSCRIBERS.
 
jibblets
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 3:47 pm

If true, it's not particularly good news for Midwest. But it's also far from the end of the road. The BoD has yet to disarm the poison pill and even 100% of the voting shares cannot replace enough of the board to disarm the poison pill for another year.

This does put great pressure on the board to either give in and negotiate with AAI or take some other drastic measure (going private, SkyWest equity, etc.) to get out of AAI's grip.

It's a victory for AAI, but they have a long way to go to actually see any Midwest planes flying as AirTran.
 
longhaulheavy
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 11:13 pm

At this point, holding off the bid starts to become risky for YX. If they keep the poison pill in place and successfully thwart Airtran, they'll have a lot of pissed off institutional investors who will probably tank the stock as soon as Airtran has gone home. Granted, that would probably put MEH back to its historic average, but still - it's tough to go from $15 to $4.

Private equity is an option, and certainly something that's being explored by the board at this point, but PE has largely stayed away from the airlines...and for good reason. It's damn hard to make an airline work. Milwaukee has a strong banking industry, and the money is probably there if a few of the big locals got together, but the question is - why would they want to? There are probably plenty of other (better) places to put their money.
 
Cubsrule
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RE: Midwest/AirTran.. Any Guesses?

Thu May 17, 2007 11:41 pm

Quoting Longhaulheavy (Reply 30):
At this point, holding off the bid starts to become risky for YX. If they keep the poison pill in place and successfully thwart Airtran, they'll have a lot of pissed off institutional investors who will probably tank the stock as soon as Airtran has gone home.

While I (obviously) haven't seen the breakdown of the tendered shares, most of the local institutional investors would not engage in this sort of behavior (and I assume that most of the institutions that have tendered are more like Octavian).
I can't decide whether I miss the tulip or the bowling shoe more
 
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mke717spotter
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 12:05 am

So basically with the poison pill in effect, we'll see YX flying for atleast another year correct?
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mpdpilot
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 12:27 am

Quoting AIRTRAN737700 (Reply 13):
will not think twice about loosing a couple of million dollars in a short term loss to flood the MKE market and hurt Midwest. Just think, if midwest goes belly up in 2 years because of an "increse" in competition there is going to be a fairly large fleet of 717's and a big market gap in MKE for the taking.



Quoting DAYflyer (Reply 15):
The offer will be rejected and FL will pummel Midwest in MCI and MWK with more and more flights, with all of those bright, shiny new 737's.

I just want to reiderate what the others have said on this matter. NW has tried to offer a lot in MKE and failed. Yes FL is a different company with a better operating cost, but it wasn't the high prices that sent NW packing it was the lack of a premium serivce that YX offers. Even the saver service is better than most.

Quoting 2175301 (Reply 27):
How they will pull lots of people from northern Illinois. I don't see it happening. The people in Illinois tend to head for O'Hare or Midway

I have to agree here. I am from the southern Wisconsin area and I haven't heard of very many people coming from Illinois to fly out of MKE in fact quite the contray there are a lot of Wisconsinites that travel to O'Hare and Midway for travel.
One mile of highway gets you one mile, one mile of runway gets you anywhere.
 
Cubsrule
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 12:41 am

Quoting MPDPilot (Reply 33):
I have to agree here. I am from the southern Wisconsin area and I haven't heard of very many people coming from Illinois to fly out of MKE in fact quite the contray there are a lot of Wisconsinites that travel to O'Hare and Midway for travel.

While it's a terribly unscientific way to study the issue, there are always a fair number of IL plates in the parking garage at MKE. I'm about equidistant from MDW and MKE, and if for whatever reason I want to avoid ORD (i.e. I'm flying to STR and connecting in ATL regardless), I'll almost always pick MKE over MDW.
I can't decide whether I miss the tulip or the bowling shoe more
 
Mainland
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 12:46 am

Quoting Mke717spotter (Reply 32):
So basically with the poison pill in effect, we'll see YX flying for atleast another year correct?

Maybe. Midwest could still come to the negotiating table. However, until the poison pill is lifted and other conditions waived, Midwest won't be going anywhere for now.
You don't need a passport to know what state you're in...
 
mpdpilot
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 12:50 am

Quoting Cubsrule (Reply 34):
While it's a terribly unscientific way to study the issue,

well I am not a scientist. I also didn't say anything about it never happening but I would have to say that of all the people I know in both states there is a general trend to travel to Chicago to travel to save money. There are very few people I know who travel from WI to save money, it is conveinent and that is why they travel from WI. I don't think that there are too many people in Northern Illinois who would find travelling to MKE convienent or cost worthy.
One mile of highway gets you one mile, one mile of runway gets you anywhere.
 
n917me
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 1:00 am

Quoting Mainland (Reply 35):
Quoting Mke717spotter (Reply 32):
So basically with the poison pill in effect, we'll see YX flying for atleast another year correct?

At least 3 years. (WI anti-takeover law)
 
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knope2001
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 1:06 am

As I pointed out once before regarding AirTran's belief they can gani a great deal of additional traffic from northern Illinois, just look at MKE-BWI.

--BWI is an AirTran focus city, so they had that gonig for them

--BWI is a good alternative with a great low-fare repuatation for travelers to the Washington and Philadelphia areas as well as Blatimore itself.

--The Washington-Baltimore area alone (without PHL) is the #4 consolidated metro area in population, just ahead of the SF Bay area.

--AirTran's flights were often thru-flights to/from BOS, another huge market with no low-fare service.

--AirTran advertised heavily in northern Illinois as well as MIlwaukee, with radio, newspaper, billboard, and direct mail.

--AirTran's average MKE-BWI fares were lower than those of Southwest on MDW-BWI

--MKE is, has long been, and will continue to be a faster alternative for much of affluent, booming Lake County than O'Hare. And it is hands-down faster and easier to get to than Midway from that area.

And how did AirTran do on MKE-BWI? Other than during peak summer season, their first attempt was glaringly empty. Their second attempt last summer (which WAS peak season) still flew almost 40% empty...worse than the first time.

Certainly there is a stream of IL traffic that uses Mitchell, and that has been true for years. It has grown over time, largely due to Midwest's persistent targeted marketing. But it is definitely not unlimited, and very likely nowhere near what AirTran is banking on to support all those new seats they plan to offer.
 
longhaulheavy
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 3:08 am

Knope2001, that's a good analysis. Frankly, I think MKE has done pretty much all that it can do to get northern Illinois travelers. There is a steady stream, but it's not huge. (Anecdotally, there are plenty of Illinois plates in the lots, but what that actually translates into % of travelers, I have no idea.)

If there's going to be growth, it will have to come from the increasing economic development of the area at the border, like Kenosha, Pleasant Prairie, and Waukegan. I personally know a number of people who work in Waukegan and live in Kenosha - for them, MKE is the obvious choice for an airport.
 
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knope2001
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 4:03 am

It certainly is a continued and gradually increasing benefit to MKE to have affluent Lake County continue to grow and creep northward into Kenosha County. But AirTran's plans seem to rely on widespread changes in travel habits of everybody north of about Willow/Palletine Rds. That might be an exaggeration, but not much of one. The people AirTran would most need to covnert are frequent travelers who are likely most entrenched in AA and UA frequent flier programs and not likely to made the trip north for a discounter.
 
Cubsrule
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 4:24 am

Quoting Knope2001 (Reply 40):
But AirTran's plans seem to rely on widespread changes in travel habits of everybody north of about Willow/Palletine Rds. That might be an exaggeration, but not much of one. The people AirTran would most need to covnert are frequent travelers who are likely most entrenched in AA and UA frequent flier programs and not likely to made the trip north for a discounter.

In my experience (as someone who lives a mile north of PWK), most of the people who will drive up to MKE aren't especially high-yield passengers, particularly when one considers carriers other than YX. Most business travelers (read: high-yield pax) as far north as Lake Forest and Lake Bluff would never dream of anyone other than UA or AA ex-ORD. So even if FL does attract passengers from Illinois, I'm not sure those passengers would be as high-yielding as FL wants or needs.
I can't decide whether I miss the tulip or the bowling shoe more
 
srbmod
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 5:49 am

Quoting Cubsrule (Reply 31):
While I (obviously) haven't seen the breakdown of the tendered shares, most of the local institutional investors would not engage in this sort of behavior (and I assume that most of the institutions that have tendered are more like Octavian).

Some of them are just selling their shares on the open market instead of tendering them (no telling how many of those shares ended up in the hands of firms like Octavian as a result). Heartland, which was one of the biggest institutionals with a stake in MEH sold quite a bit of their shares in recent months as the stock price climbed. Perhaps they're hedging that if the deal fails to go through that the stock will drop and they can re-buy shares at a low price and still have made a profit off of it.

With 56.6% of the stock being tendered, things will definitely start to get interesting to say the least. The codeshare partnership YX has announced with NW is just another twist in this story. The further extension of the tender offer means that AAI is definitely in it to win it. Oh to be a fly on the wall at the upcoming MEH shareholders meeting.....
 
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mke717spotter
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 7:00 am

Quoting N917ME (Reply 37):
At least 3 years. (WI anti-takeover law)

Well that's good. So I won't need to be in a rush to book one last flight on YX then eh?
Will you watch the Cleveland Browns and the Detroit Lions on Sunday? Only if coach Eric Mangini resigned after a loss.
 
sllevin
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 10:36 am

Quoting Jibblets (Reply 29):
It's a victory for AAI, but they have a long way to go to actually see any Midwest planes flying as AirTran.

While that's certainly true, this is actually an enormous victory for AAI. This "change of heart" on the behalf of investors is a clear signal that while they held out to get the best possible deal from AAI, that the majority of shareholders feel this IS just about the best deal that can be gotten. I suspect another 25% of stakeholders will accept this deal once they are convinced it's the best offer that will be forthcoming.

So YX management is on a VERY short leash. If they continue against the wishes of the stockholders and keep the company independent, they are going to have to produce great results quickly or they'll find themselves on the street. This is going to turn from "management protecting the people" to "management wants to keep their fat salaries regardless of the cost to shareholders" in an instant.

Steve
 
2175301
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 11:27 am

The other twist that many have not heard of is.... how will new board members actually behave in the future.

Let's assume for a moment that the AirTran nominated board members get elected.

Once on the Midwest board they have a duty to protect and consider the interest of the Midwest STAKEHOLDERS.

That includes the existing midwest customers, employees, and companies they do business with... along with the stockholders.

Also, they will have access to Midwest's business plan.

Their is no guarantee whatsoever that they will then actually vote for merger.

Several days ago their was an article in the Milwaukee Paper that speculated that 2 of the 3 new board members could become backers of the current Midwest plan and have no interest in AirTran at all. What if it were all 3. Even if only one converts to the current board stance it will have an effect.

http://www.jsonline.com/story/index.aspx?id=606308

It might take a long time to get a board really changed to AirTrans view .

I'm not so sure that the board would be on any kind of short leash at all. My guess is that unless at least 75% of shares get tendered that the board will actually feel little pressure for at least the next year or so. If even some of the new board members realize that their is no overall value to the Midwest stakeholders from merger... There will be no (as in zip) pressure on the board.

There is also the fact that the poison pill exist. If that gets triggered all of those tendered shares will be very diluted in value. I am not sure of the details of the Midwest poison pill. Typically it awards stock to all stockholders that held stock on a certain date in the past (sometimes predating when the poison pill was adopted). Often 2 or 3 shares for every share of stock they held then (but perhaps only 1 share). The speculative investors who only want to make money on the merger would be left out in the cold.

This is a long long way from over. It will take years if it ever happens (unless AirTran can get at least 75% of the shares tendered).
 
cellardoor
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 2:47 pm

It was all I could do not to say this in my arrival announcement into MKE this afternoon-

"Ladies and Gentlemen, AirTran Airways would like to thank you, the citizens of Milwaukee, for making us your NEW hometown airline!"
 
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knope2001
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 8:26 pm

If the citizens of Milwaukee had anything to do with it, AirTran wouldn't win and Midwest would live on alone.
 
longhaulheavy
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 9:28 pm

Well, YX isn't letting this go without a fight. They've finally done what I've wanted them to do for years - partner with NW.

http://www.jsonline.com/story/index.aspx?id=607454

Midwest Airlines said Thursday it has agreed to a partnership with rival Northwest Airlines, a move that could help deflect pressure on Midwest to accept a hostile takeover bid from AirTran Holdings Inc. The new partnership allows passengers to book their entire flight on a single ticket between the two airlines. All travel segments then earn mileage credits on either Midwest Miles or Northwest WorldPerks frequent flier programs.

 
nitrohelper
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RE: Midwest/AirTran.. Any Guesses?

Fri May 18, 2007 9:54 pm

Quoting Longhaulheavy (Reply 48):

Is this the first step to a Midwest buy-out by Northwest ?
They could use the DC-9-717 model for replacements.

When will NWA retire the DC-9s ? anybody hear a date?