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sideflare75
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 8:30 am

Quoting Flyibaby (Reply 47):
If YX doesn't want to listen to FL

Why does everyone say that YX doesn't want to listen to FL. They made an offer in October, and as we know it was not the first. YX hired outside financial advisors to look into it. The board met and decided not to take the offer. They spent 6 weeks looking into it before they held the board meeting. What else are they obligated to do?

It's pretty clear that YX wants to go it alone so why should they be forced to sit down and listen to anything?
 
flyibaby
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 8:40 am

Quoting Sideflare75 (Reply 50):
Why does everyone say that YX doesn't want to listen to FL. They made an offer in October, and as we know it was not the first. YX hired outside financial advisors to look into it. The board met and decided not to take the offer. They spent 6 weeks looking into it before they held the board meeting. What else are they obligated to do?

It's pretty clear that YX wants to go it alone so why should they be forced to sit down and listen to anything?

I'll give you one reason why. They are publicy owned, and Airtran believes that the shareholders of YX aren't getting a fair say. Exactly the reason I believe FL will put up a proxy fight at the next shareholders meeting.
 
N353SK
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 8:49 am

Quoting Sideflare:
Staggered board doesn't really mean much, and I'll tell you why with a prediction. If YX doesn't want to listen to FL, FL will buy at least 10% of YX stock. At the next board meeting, the board will have to let the Airtran representative speak as they have to have at least 1,000 shares to be included on the agenda, and will offer a proxy fight straight to the shareholders. Mark my word on this. At this point, with shareholder approval, it no longer matters what the Wisconsin hostile takeover laws are, or furthermore what the staggered board is comprised of.

They still have to convince YX's stockholders to sell, and many of them are loyal wisconsinites. Sure, money talks, but you can only speak so loudly until the whole deal gets too costly for FL.




Joe Leonard is still on his publicity blitz up in MKE. His latest claim is that unless YX sells to FL they will be obliterated the next time NW adds flights to MKE.

Quote:
If AirTran Holdings Inc. doesn't buy Midwest Air Group Inc., then Midwest will be left to fend for itself when Northwest Airlines Corp. again heats up competition at Mitchell International Airport, Leonard says.

For those of you who would like to read further: http://www.jsonline.com/story/index.aspx?id=542609


I think that thanks to Wisconsin's Hostile Takeover laws YX will have enough time to buy A320s (I think the past week's events have ruled out the 737) and get a 50-seat RJ carrier. After all of this we'll see if YX still looks so enticing to FL.

[Edited 2006-12-18 00:52:36]
 
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TVNWZ
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 8:57 am

Quoting Flyibaby (Reply 51):
I'll give you one reason why. They are publicy owned, and Airtran believes that the shareholders of YX aren't getting a fair say. Exactly the reason I believe FL will put up a proxy fight at the next shareholders meeting.

They listened. Price was not high enough. Keep talking. And that boardroom thing could hit FL. KKR has been snooping around. I think that is why Joe is in such a hurry to gobble up YX. Makes it a tad harder to buy him.

Let's see who buys whom.

[Edited 2006-12-18 01:06:04]
 
SkyexRamper
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 9:00 am

Quoting N353SK (Reply 52):
His latest claim is that unless YX sells to FL they will be obliterated the next time NW adds flights to MKE.
LOL ok....when is NWA going to add more flights!?!?!? They ran their operations from a focus city to a mini hub all the way back down to near nothing after Jan 1st. I don't think they'll be trying anything fancy again for a while. You could probably see them bring back MCO, LAS, LAX in the summer but thats probably it.

But while everyone is talking about shareholders and money.....how do people like me, the employee, benefit from this whole thing? I sure hope the cookie palace puts the employees higher than the bottom, sure the shareholders have the money but the employees are the ones who really have the most to gain or lose.

[Edited 2006-12-18 01:07:29]
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N353SK
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 9:12 am

Quoting SkyexRamper (Reply 54):
LOL ok....when is NWA going to add more flights!?!?!? They ran their operations from a focus city to a mini hub all the way back down to near nothing after Jan 1st. I don't think they'll be trying anything fancy again for a while. You could probably see them bring back MCO, LAS, LAX in the summer but thats probably it.

That's sort of my point. Joe Leonard is trying his damnedest to make Wisconsin believe that their options are A) Sell to FL or B) Go out of business. In my opinion it's all bunk, but you can't blame him for trying.

Quoting SkyexRamper (Reply 54):
how do people like me, the employee, benefit from this whole thing?

You don't. To put it mathematically, Sharholders > Board > Employees

[Edited 2006-12-18 01:14:11]
 
justplanenutz
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 9:24 am

Finally, thanks Knope2001 for the well-reasoned response. A few things:

Quoting Knope2001 (Reply 49):
One would logically think that the 2x2 Signature product would be *most* important on the long-haul flights. Unfortunately it is simply not economically viable.

Won't long-haul Signature face the same fate at MCI as it did at MKE? On a long-term basis, why could it be viable at MCI but not the hometown?

At the end of the day, it seems YX alone will be left with Signature to NE biz markets (BOS, LGA, DCA). If that's the case and B6 comes to MKE and MCI, isn't that the real deal killer?

YX has a great product and I'm not trying to pooh-hooh it too much. It just seems that, given it's stock has seen $4 this year, YX folks have their rosy shades on. As I said earlier, I've been there before with Braniff.
 
Cubsrule
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 10:30 am

Quoting MUWarriors (Reply 32):
I think NW learned from their last foray, and would be surprised if they tried it again.

Last time around, NW learned that they could not bleed YX out of MKE. But they are very competitive with FL at IND, with significantly higher loads AND yields on some routes, and there's no reason to think they couldn't do the same in MKE.

Quoting BH (Reply 34):
Not saying that YX stock doesnt have the potential to trade at 11+ in the future, But I believe the current price is being stimulated by short term investors that are buying up a lot of stock.

I would tend to agree, but another way to look at it might be that the FL offer is a signal to investors of what FL sees as YX's value, and the stock could conceivably settle there.

Quoting JustPlaneNutz (Reply 36):
Surely someone other that me gets that we are at the top of a business cycle and Signature will be under tremendous pressure when biz travel drops and LCC competition spreads to MKE. No?

Why would LCC competition spread to MKE? F9 does fine, but FL isn't exactly a resounding success and U5 is gone. It doesn't seem like MKE is exactly ripe for the LCC picking. NW tried LCC fares for a while and it didn't work. Why would a "true" LCC be different? No one, not even WN, makes money on $200 round trips to MCO.
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sideflare75
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 10:51 am

Quoting Flyibaby (Reply 51):
Airtran believes that the shareholders of YX aren't getting a fair say.

I don't think AirTran cares about any of the shareholders of YX and will say anything to try and scare them into siding with them. I've read all the articles in the local papers and listened to the interveiws they did last week. They sure sound like they have it all figured out when in fact they don't.

How in the world can they make a statement like "this deal will be good for YX's employees". Speaking from a mechanics point of view, we have people that have been around even before Midwest Express existed. How do you think they will feel going to the bottom of FL's seniority list and pay scale? I guess the promise of pay raises every year will more than make up for the large cut in pay. I for one would rather remain topped out on our current scale thank you very much.

And why would they say they will keep all the jobs. That won't happen and they know it. It would be stupid to keep all the jobs when quite a few of them already exist in either ATL or MCO. Its these kind of statements that make me question their motives. They want this company because they need somewhere to fly new planes. Without it where will they put all those new 737s next year? With no profitable routes to put them on what is going to happen to their financial situation? They talk about YX having to deal with a restructed Northwest, well they will also be dealing with a restructured Delta.
 
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TVNWZ
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:02 am

Quoting Sideflare75 (Reply 58):
They talk about YX having to deal with a restructed Northwest, well they will also be dealing with a restructured Delta.

That is what they are doing. They are trying to make it harder for someone ele to buy them. Consolidation mania will not stop with the heritage airlines. it will spread to the LCCs.

Tim knows if he hangs tough long enough, someone could possibly (KKR?) raise his ugly head and make a play for Airtran. But, will the board play along? Possibly. One thing is certain, though, the current price is not high enough.
 
PlanesNTrains
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:05 am

Quoting N353SK (Reply 52):
I think that thanks to Wisconsin's Hostile Takeover laws YX will have enough time to buy A320s (I think the past week's events have ruled out the 737) and get a 50-seat RJ carrier. After all of this we'll see if YX still looks so enticing to FL.

I think this seems likely, given the recent events. I'd be very surprised to seem them take the 737, though I always thought they'd go Airbus anyways, due to the extra width cabin primarily.

Quoting TVNWZ (Reply 53):
They listened. Price was not high enough. Keep talking. And that boardroom thing could hit FL. KKR has been snooping around. I think that is why Joe is in such a hurry to gobble up YX. Makes it a tad harder to buy him.

Let's see who buys whom.

True. Eat or get eaten. Ironically, FL is probably the only carrier hungry for YX, and I can't say as though anyone else (non-airline) would be interested either. They might be better off in the long run going private if they want to remain independent, but for now, that probably shouldn't be the priority.

Quoting Cubsrule (Reply 57):
Last time around, NW learned that they could not bleed YX out of MKE. But they are very competitive with FL at IND, with significantly higher loads AND yields on some routes, and there's no reason to think they couldn't do the same in MKE.

One difference: In MKE, YX has name recognition and 20 years of history. FL in IND didn't. The same would hold true if FL acquired YX and NW moved back in. NW has great brand loyalty in MKE and would be a very strong competitor - if they chose to go down that road again. With a million DC9's to replace in the coming years (give or take), how many aircraft can they spare for a new focus operation?

Quoting Knope2001 (Reply 49):
When Midwest unrolled Saver flights, some wondered how Midwest would actually sell so many *more* seats when the quality of the product was reduced (from 2x2 to 2x3). In fact the Milwaukee market reponded better than most through, and Midwest packs most Saver market flights most of the year. I do think that the M80 replacements will eventually also have a 2x2 premium section to capture that market better, but who knows what the details will be.

Am I the only one who sees the irony in this paragraph?  Smile

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mke717spotter
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:19 am

Quoting Knope2001 (Reply 49):
USA3000

Speaking of USA3000, are they going to be coming back to MKE anytime soon? Or are they gone for good?

Quoting Flyibaby (Reply 51):
YX will have enough time to buy A320s (I think the past week's events have ruled out the 737)

What events have ruled out the 737? I agree if YX were to get a320's FL may not be as interested then. But I have always thought that 737's would be better for YX.
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Cubsrule
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:24 am

Quoting PlanesNTrains (Reply 60):
With a million DC9's to replace in the coming years (give or take), how many aircraft can they spare for a new focus operation?

With CR9s and 175s coming, quite a few. Even if they park the -9s for a while, they are owned, so they could bring them right back out of the desert. By 2009 (which, if ever, is really the timetable we're talking about for this merger), NW could probably add 40 daily flights to MKE in less than a month. All of the infrastructure at MKE is in place.
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SkyexRamper
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:59 am

Quoting N353SK (Reply 55):
To put it mathematically, Sharholders > Board > Employees

I'm suprised you put employees in there....heck...YX is more like this..

Timmy > his friends > Timmy > shareholders* (well just the rich) > his friends > board members [*see shareholders] > shareholders > bank > Timmy.
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sideflare75
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 12:07 pm

Quoting TVNWZ (Reply 59):
That is what they are doing. They are trying to make it harder for someone ele to buy them.

Thanks TVNWZ. I guess I never thought about them trying to keep from getting bought themselves. That makes sense. This next year is going to be very interesting in this industry. I just never expected to be in the middle of it.
 
Mainland
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 1:06 pm

This poison pill is going to be hell for AirTran, which is exactly what it's meant to do...

Quoting Flyibaby (Reply 47):
Who cares if they have to wait 3 years. As stated above, they could operate a subsidiary for that perod of time, and still add Airtran metal into the mix. To be perfectly honest, the aircraft could actually be painted FL colors with the dba Midwest Airlines next to the passenger door. The poison pill huh? So what? They can only do that one of two ways:
1. Offer a two for one stock split...which won't happen at $11.00 a share
2. Offer more shares of stock, which still, at $11 a share, will be hard to find a bank to finance, much like an IPO.

Regarding the poison pill, not quite. Here's the lingo for Midwest's poison pill from their 10-K filing:

"The Company was party to a rights agreement that expired by its terms on February 13, 2006. On February 15, 2006, the Board of Directors adopted a new rights agreement and declared a dividend of one Preferred Share Purchase Right (“Right”) on each outstanding share of the Company’s Common Stock that was distributed to each shareholder of record of the Company’s Common Stock on February 16, 2006. The Rights are exercisable only if a person or entity acquires 15% or more of the Common Stock of the Company or announces a tender offer for 15% or more of the Common Stock. Each Right initially entitles its holder to purchase one one-hundredth of a share of the Company's Series A Preferred Stock at an exercise price of $21.00, subject to adjustment. If a person or entity acquires 15% or more of the Company’s Common Stock, then each Right will entitle the holder to purchase, at the Right’s then-current exercise price, Company Common Stock valued at twice the exercise price. The Board of Directors is also authorized to reduce the 15% threshold to not less than 10%. The Rights expire in 2016."

The poison pill does not require a stock split, or a bank to finance the offering. Rather, once either one of the two triggering events occur the rights automatically come into play -- thousands of shares of this Series A Preferred Stock will be issued. The preferred stock presents two barriers for AirTran.

1. Each share of preferred stock is entitled to 100 votes in common stock.
2. Each share of preferred stock is entiled to receive 100 times the amount offered for common stock.

Sourcing from the SEC filing from Feb 22:

"Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the Corporation."

"Finally, in the event of any merger, consolidation or other transaction in which common stock is exchanged, each share of Series A junior participating preferred stock will be entitled to receive 100 times the amount received per share of common stock."


Obviously barrier #2 is more troubling for AirTran. Lets do some math....

18,604,442 (YX shares outstanding) x .01 (Conversion rate into preferred stock) = 186,044 (Maximum preferred outstanding)

$11.25 (AirTran's offer) x 100 = $1,125 x 186,044 = $209,299,500

Given the current offer, AirTran would need to pony up, at most, an additional $209 million just to pay off the affects of the poison pill. Ouch!

Needless to say, the way -- perhaps the only way -- to get this deal done is to get the Midwest board of directors to waive the poison pill. They don't seem inclined to doing that.

A proxy vote/battle, a la taking the case directly to the shareholders as has been discussed here, wouldn't seem to do much good itself since it doesn't take care of the underlying fact that the poison pill needs to be waived. I'll add to that it would seem, IMO, Midwest's board of directors would be under no breach of fidcuary duty to their shareholders by rejecting the proposal from AirTran. Sure, some shareholders may be mad for not taking the $11.25 on the table -- but price is only one of many factors. I have to believe the board has taken all the factors into consideration and still decided to reject.

Nonetheless, Midwest would seem to be the one in control over this merger.
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knope2001
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 1:52 pm

Quoting PlanesNTrains (Reply 60):
Quoting Knope2001 (Reply 49):
When Midwest unrolled Saver flights, some wondered how Midwest would actually sell so many *more* seats when the quality of the product was reduced (from 2x2 to 2x3). In fact the Milwaukee market reponded better than most through, and Midwest packs most Saver market flights most of the year. I do think that the M80 replacements will eventually also have a 2x2 premium section to capture that market better, but who knows what the details will be.

Am I the only one who sees the irony in this paragraph?

I suspect you're referring to saying out one side of the mouth "If AirTran takes over Midwest and ditches Signature it will be catastrophic" and out the other side "When Midwest added Saver, the market responded better than most thought it would". I appreciate that!  Smile However there are a couple of key differences.

Saver was introduced to Milwaukee's highest-volume leisure destinations, markets where Midwest was a significant player but didn't have commanding market share. Midwest had some low fares seats on their 2x2 aircraft, but not nearly enough for the market. And they couldn't offer many more because the 2x2 product wouldn't work with low fares. When they switched to Saver, they were able to offer many more low-fare-bucket seats, and the market follwed them. It's not that Saver stimulated the market so much, but rather the price-sensitive leisure traffic that was already there was eager to switch to Midwest. In particular, a lot more people used to fly to Florida and the southwest with connecting flights to get cheap fares, and now more of them fly Midwest. It's no conincidence that in the time since Saver rolled out, there have been big capacity cutbacks in Milwaukee from airlines like Delta, USAirways and United. Midwest increased seating on their M80's to Saver destionations by about 25%, and they were able to fill those seats by poaching existing connecting passengers from Delta, United, American and others by offering more low-fare seats.

Do the same thing to most Saver markets and the proposition isn't as promising. Markets from Milwaukee like Newark, Philadelphia and Dallas are not bottomless lesiure markets like Florida, and there are not big chunks of market share flying connecting intineraries looking for better fares. If the 717's in these markets are changed to AirTran seating, it's an increase of about 33% more seats per fliight. But unlike the Saver markets, there are not big numbers of passengers flying on cheap connecting itineraries that they can poach. MKE-PHL is only so big, and even with stimulation by lower fares it's questionable that there are so many more passengers eager to switch. What you end up with then is overcapacity, probably leading to fewer flights and loss of competitive scheduling as the competition flies smaller, more frequent flights.

That details concerns if anybody would switch the 717 to high-density seating, including Midwest. With AirTran the concerns are deeper in part because they have deomonstrated a tendency to sharply cut or discontinue markets in the offseason. MKE-PHL can support high-density 717's in summer, but come winter those aircraft would be sent to Florida. So only USAirways would fly the market year round, and pretty soon come spring the regular travelers who fly to PHL don't switch back to AirTran/Midwest. Instead AirTran ends up just carrying the excess vacationer traffic, hurting yield, leading to more flight cuts, and perhaps an eventual termination. AirTran would definitely *like* for Milwaukee to work out, and frankly they seem to be running out of places to fly their new planes profitably. But their plans are so pie-in-the-sky it is worrisome. They publicly said likely new markets from MKE include Raleigh, Buffalo, Orange County and Seattle. Buffalo-Milwaukee isn't big enough to support anything bigger than a Beechcraft, and Raleigh-Milwaukee isn't that much larger. Seattle would work well only for about 3-4 months of the year. And Orange County? AirTran doesn't even have rights to fly there. Do they have a *realistic* plan?? If they think they are going to build Milwaukee into a long-haul connecting hub for markets like Buffalo-Orange County, they will lose money hand over fist and Milwaukee will ultimately be cut way back. And ultimately it doesn't much matter to AirTran if they only fly MKE-LAX in summer, or if they end up dumping MKE-EWR completely.
 
USPIT10L
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 2:21 pm

Quoting Knope2001 (Reply 66):
But their plans are so pie-in-the-sky it is worrisome. They publicly said likely new markets from MKE include Raleigh, Buffalo, Orange County and Seattle. Buffalo-Milwaukee isn't big enough to support anything bigger than a Beechcraft, and Raleigh-Milwaukee isn't that much larger. Seattle would work well only for about 3-4 months of the year. And Orange County? AirTran doesn't even have rights to fly there. Do they have a *realistic* plan?? If they think they are going to build Milwaukee into a long-haul connecting hub for markets like Buffalo-Orange County, they will lose money hand over fist and Milwaukee will ultimately be cut way back. And ultimately it doesn't much matter to AirTran if they only fly MKE-LAX in summer, or if they end up dumping MKE-EWR completely.

That is worrisome. I figured markets like SEA, SAT, STL, MSP, IND, and MSN stood to gain as much in new service as MKE and MCI when you add the new services that FL "promised" to start. But if they're looking at low-yielding markets like BUF-MKE, and SNA-MKE, you're absolutely right--FL would have no chance to build up MKE. I skipped the Q & A of the conference call because I figured alot of the questions would be stupid and meddlesome.

Thanks for your detailed explanation of Saver and Signature service. Your knowledge of the MKE market is very impressive and I'm glad I added you to my RU list.
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PlanesNTrains
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 6:43 pm

Quoting Cubsrule (Reply 62):
With CR9s and 175s coming, quite a few. Even if they park the -9s for a while, they are owned, so they could bring them right back out of the desert. By 2009 (which, if ever, is really the timetable we're talking about for this merger), NW could probably add 40 daily flights to MKE in less than a month. All of the infrastructure at MKE is in place.

Owned or not, if they aren't flying, they aren't making money. I can't help but think that if they are parking DC9's, it's not so that they can throw them back into the system later. This would seem to affect crew pools/training, maintenance, etc. Having said that, in the nearterm they certainly could add flights rather than take them out of service. As time goes by, though, I just have a hard time seeing these birds remaining in revenue service.

One thing I know from reading these threads, though, and that is that I don't know a lot. Everyone seems to have this whole merger/non-merger figured out, right down to the routes that would/wouldn't work, service levels that would be supported, etc. I'm much more of a passive observer, and I may be way off the mark on my opinions. I appreciate your thoughts.

Quoting Knope2001 (Reply 66):
I suspect you're referring to saying out one side of the mouth "If AirTran takes over Midwest and ditches Signature it will be catastrophic" and out the other side "When Midwest added Saver, the market responded better than most thought it would". I appreciate that! However there are a couple of key differences.

Oh, I understand. Just thought it was humorous. It reminds me of politics: Switch a few names around, and the story could easily slant the other direction than you'd planned.  Smile

-Dave
-Dave


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knope2001
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:18 pm

Quoting Knope2001 (Reply 49):
I'm out of time to type here for now, but I will post a follow-up with places where things have improved or are improving above and beyond what was seen in these profitable quarters later or tomorrow.

In that prior post, I talked about how Midwest still made money in the most recent quarters in spite of a number of challenges. These last two quarters of profit are not simply because Midwest lucked out and had the best possible circumstances. However those proffits were not huge (3rd quarter was pretty slim) and indeed some things could get tougher...fuel could get higher, USAirways could upgrade MCI-DCA to mainline, etc. The flipside of that is there are still some improvements for Midwest sill coming or not fully realized in those recent quarters.

(a) Reduced competition
Compared to those profitable quarters:
USA3000 is gone on MKE-RSW
AA is gone on MCI-LGA
NW will be gone on MKE-LAX, MKE-LAS, MKE-MCO
FL is gone on MKE-BWI
UA is gone on MCI-SAT
AA has contined to drop frequency on MKE-DFW (is 3x from as high as 5x)
US has continued to drop frequency on MKE-PHL (is 3x from as high as 5x)

(b) Improving general pricing environment. Part of this is that low-cost carriers like AirTran, JetBlue and Frontier are having a harder time just breaking even, and even Southwest has been more cooperative with fare hikes.

(c) Midwest Connect fleet changes will improve their efficiency and cost structure. More FRJ's lowers cost by spreading fixed costs over a larger fleet, and getting rid of the BE1s will save signnificant cost and improve efficiencies with just one aircraft type to support, fly, maintain, etc. (There is no official word on exactly when the last one is going, and it part it depends on what they do with the EAS contracts which all expire in a few months).

(d) The frequent flier agreement with Northwest is underestimated in its importance. As much loyalty as Midwest has in Milwaukee (and they do) Northwest is the carrier of choice here internationally and for places that Midwest doesn't fly. (Of course NW has detractors here too, but NW has a big base here.) The big base of NW frequent fliers in MKE was not enough to help NW succeed in their battle against YX because too many of them are also very loyal to YX. But now that YX flights earn NW miles, and NW is cutting all their non-hub flying here, frequent travelers who are primarily loyal to NW are much more likely to choose YX nonstops because they can still get NW miles towards that European vacation they are saving for. Yes, the old partnership with AA also gave Midwest access to international awards, but the change back to NW which happened a few months ago is huge.

(e) The expansion off Midwest Connect flying with 50-seat RJ's (by a third party) will help to increase Midwest's market share, frequent flier base, and loyalty in bothh MKE and MCI. That means more traffic, more loyalty, more pricing power.

(f) The M80 replacements are not coming in the next few quarters, but that is a definitely operational improvement coming down the road just as the 717's were a big improvement over the DC9's.

I'm not an employee or insider at Midwest (although I try to find out all I can) but in a recent employee communication that talked about their non-fuel CASM goal, the company spoke of other ongoing cost-reduction measures. A key goal of 2006 was to have at least $1 in net profit, and they said they are likely to make that goal. But they also know that this is only a step on the road to solid profitability, and that competitors are continuing to reduce their costs as well.
 
daus
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RE: AirTran Proposes Merger W/ Midwest Air II

Mon Dec 18, 2006 11:52 pm

Quoting Knope2001 (Reply 66):
They publicly said likely new markets from MKE include Raleigh, Buffalo, Orange County and Seattle. Buffalo-Milwaukee isn't big enough to support anything bigger than a Beechcraft, and Raleigh-Milwaukee isn't that much larger.

I think you have to keep in mind that these markets are probably not envisioned for just O&D MKE traffic. As a AirTran hub, MKE would get these flights as a way of enabling true East Coast/West Coast traffic that AirTran today can't do without sending people through Atlanta. Instead of Midwest Connect feeders from Grand Rapids into MKE you have to picture AirTran 717's from Buffalo/Ralaigh.

Will it work? I don't know, but I would imagine that would be the deal.
 
Cubsrule
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 12:40 am

Quoting PlanesNTrains (Reply 68):
As time goes by, though, I just have a hard time seeing these birds remaining in revenue service.

No, certainly not, but in the short term (3-4 years) when they are still in the process of retiring DC-9s, bringing some back would be relatively easy.
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SkyexRamper
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 2:18 am

Quoting Knope2001 (Reply 69):
More FRJ's lowers cost by spreading fixed costs over a larger fleet, and getting rid of the BE1s will save signnificant cost and improve efficiencies with just one aircraft type to support, fly, maintain, etc
It might only lower the fixed costs, by adding more 328s in place of the B1900D, but I don't see YX changing pricing to reflect the more seats on the new 328 routes, we are still flying those upgraded routes with profitable B1900D pax counts.

As for the whole CRJ flying contract I see that only going to fail YX as it's going to alienate our customers from what we are by truly throwing the RJ in their face. Big deal they say a 10% growth each year for the next few years. YX was never suppose to be about the RJ but now they see it as the new future....though over carriers are starting to see the turboprop as the near future.

[Edited 2006-12-18 18:23:38]
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TVNWZ
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 2:49 am

Knope2001

You are spot on in your analysis of both YX and NW. You are now on my RU list as well.

I still think it is about a) buy before being bought and b) more 717s. That's it.
 
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JBo
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 3:00 am

Quoting Skyexramper (Reply 72):
As for the whole CRJ flying contract I see that only going to fail YX as it's going to alienate our customers from what we are by truly throwing the RJ in their face. Big deal they say a 10% growth each year for the next few years. YX was never suppose to be about the RJ but now they see it as the new future....though over carriers are starting to see the turboprop as the near future.

How are we "throwing the RJ" in the customers' faces by using the new capacity to solidify existing regional routes and open new ones to funnel traffic into MKE and onto the mainline craft? With perhaps a few exceptions, I do not believe the new RJ flying will be taking down mainline service.

If anything expanding the regional services is a necessary evil to our success. It may not be the optimal solution, but it's the best for the soonest results.
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 3:25 am

Press Release Source: AirTran Airways

AirTran Airways to Bring New Jobs to Milwaukee as Part of Proposed Midwest Merger

Monday December 18, 1:03 pm ET

-Growing Airline Ready for Another Year of Double Digit Growth-

ORLANDO, Fla., Dec. 18 /PRNewswire-FirstCall/ -- AirTran Holdings, Inc. (NYSE: AAI - News), the parent of AirTran Airways, which last week publicly disclosed its October 20, 2006, proposal to acquire all of the outstanding common stock of Midwest Air Group, Inc. (Amex: MEH - News) for $11.25 per Midwest share in cash and AirTran stock or a total equity value of approximately $290 million and possibly more, today reiterated its plan to add more jobs and flights in the Milwaukee market should the merger be approved by Midwest shareholders.

More than a year ago, AirTran management presented its growth plan to Midwest which was summarily rejected by the airline's management and Board of Directors without due consideration. AirTran made a second proposal this year, which was also rejected by the Midwest management and Board. Following the public disclosure of the AirTran proposal, Midwest has said that it believed the merger would result in a loss of jobs and flights in Milwaukee, an assumption that AirTran has challenged.

AirTran Airways has added more than 2,800 Crew Members, an increase of over 75 percent, from 2000 until 2005. During that same time period, according to its filings with the Securities and Exchange Commission, Midwest Airlines has disclosed that its employment has declined by over 500 employees, for a 13 percent reduction. In 2006 alone, AirTran has added over 700 new jobs.

"AirTran has 60 new Boeing aircraft on order, and we will need more Crew Members with each aircraft delivery. AirTran has the track record when it comes to adding jobs, and is poised to add over 3,000 jobs in the next five years," stated Joe Leonard, AirTran Airways' chairman and chief executive officer. "In the past five years, AirTran has opened a new reservation center, built a new maintenance technical operations center and hangar, opened a new flight operations training center and has inaugurated service to 28 new cities and 89 new routes. AirTran has 60 more firm deliveries of new Boeing 737 aircraft coming over the next three years. Midwest has two used MD-80 aircraft on order, if it can come to final contractual terms with the lessor of those aircraft. AirTran has both its history and the future firm aircraft orders to deliver on its pledge to add jobs in Milwaukee. Through our proposed merger we intend to create more jobs and more opportunities for career advancement while adding new nonstop flights and making Milwaukee a major hub for AirTran Airways," stated Leonard.

AirTran Airways, a Fortune 1000 company and one of America's largest low-fare airlines with 8,000 friendly, professional Crew Members, operates nearly 700 daily flights to 52 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways' aircraft features the fuel-efficient Boeing 737-700 and 717-200 to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. For reservations or more information, visit http://www.airtran.com/ (America Online Keyword: AirTran).

Forward Looking Information

Certain of the statements contained herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may, " "will, " "expect, " "intend," "indicate," "anticipate," "believe," "forecast," "estimate," "plan, " "guidance," "outlook," "could, " "should," "continue" and similar terms used in connection with statements regarding the outlook of AirTran Holdings, Inc., (the "Company"). Such statements include, but are not limited to, statements about expected fuel costs, the revenue and pricing environment, the Company's expected financial performance and operations, future financing plans and needs, overall economic conditions and the benefits of the business combination transaction involving Midwest Air Group, Inc. ("Midwest") and the Company, including future financial and operating results and the combined companies' plans, objectives, expectations and intentions. Other forward-looking statements that do not relate solely to historical facts include, without limitation, statements that discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to, the following: the Company's ability to achieve the synergies anticipated as a result of the potential business combination transaction involving Midwest and to achieve those synergies in a timely manner; the Company's ability to integrate the management, operations and labor groups of the Company and Midwest; the impact of high fuel costs; significant disruptions in the supply of aircraft fuel and further significant increases to fuel prices; the Company's ability to attract and retain qualified personnel; labor costs and relations with unionized employees generally and the impact and outcome of labor negotiations; the impact of global instability, including the current instability in the Middle East, the continuing impact of the U.S. military presence in Iraq and Afghanistan and the terrorist attacks of September 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events that affect travel behavior; adequacy of insurance coverage; reliance on automated systems and the potential impact of any failure or disruption of these systems; the potential impact of future significant operating losses; the Company's ability to obtain and maintain commercially reasonable terms with vendors and service providers and its reliance on those vendors and service providers; security-related and insurance costs; changes in government legislation and regulation; the Company's ability to use pre-merger NOLs and certain tax attributes; competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in-court or out-of-court restructuring by major airlines and industry consolidation; interruptions or disruptions in service at one or more of the Company's hub airports; weather conditions; the impact of fleet concentration and increased maintenance costs as aircraft age and utilization increases; the Company's ability to maintain adequate liquidity; the Company's ability to maintain contracts that are critical to its operations; the Company's fixed obligations and its ability to obtain and maintain financing for operations, aircraft financing and other purposes; changes in prevailing interest rates; the Company's ability to operate pursuant to the terms of its financing facilities (particularly the financial covenants); the Company's ability to attract and retain customers; the cyclical nature of the airline industry; economic conditions; and other risks and uncertainties listed from time to time in the Company's reports to the Securities and Exchange Commission. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. All forward-looking statements are based on information currently available to the Company. The Company assumes no obligation to publicly update or revise any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K/A for the period ended December 31, 2005, which is available at www.sec.gov and at http://www.airtran.com/.

Additional Information

Subject to future developments, AirTran may file with the United States Securities and Exchange Commission a registration statement to register the AirTran shares which would be issued in the proposed transaction and/or a proxy statement with respect to the proposed transaction. Investors and security holders are urged to read the registration statement and/or proxy statement (when and if available) and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Investors and security holders may obtain a free copy of the registration statement and/or proxy statement (when and if available) at www.sec.gov. The registration statement and/or proxy statement (when and if available) and such other documents may also be obtained free of charge from AirTran by directing such request to: Richard P. Magurno, Corporate Secretary, AirTran Holdings, Inc., 9955 AirTran Boulevard, Orlando, Florida 32827.


Media Contacts:
Tad Hutcheson
678.254.7442
[email protected]

Judy Graham-Weaver
678.254.7448
[email protected]
--------------------------------------------------------------------------------
Source: AirTran Airways
 
airtran737
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 4:06 am

I have been told that the AL pilots are having their monthly ALPA meeting this Wednesday and that Steve Kolski will be a guest speaker. The pilots are definately keeping an open mid to all of this which is evident by letting AirTran's VP of Operations come and speak to them. Should prove to be interesting.
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BH
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 4:16 am

Quoting AirTran737 (Reply 76):
I have been told that the AL pilots are having their monthly ALPA meeting this Wednesday and that Steve Kolski will be a guest speaker. The pilots are definately keeping an open mid to all of this which is evident by letting AirTran's VP of Operations come and speak to them. Should prove to be interesting.

I read that the both pilot unions were not taking a side on the issue, I believe they also said they were disappointed in the managments review of the proposal.
 
quickmover
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 4:42 am

The Airtran press release today has some pretty compelling arguments from the employees point of view. The shareholders, of course, will have the final say. I wonder if the real sticking point here is that YX upper management will lose their jobs.

Does anyone know when all of this will come to a head?
 
n917me
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 6:39 am

Expect a big announcement this week regarding the 50 seat RJ deal with Skyway. EXPANSION for both YX and Skyway.
Tims has told AirTran he will move forward with the 2007 plans..this is just the start.
FL has new aircraft coming online that they are not able to defer..they want this merger to go through quickly..or else where are they going to place the aircraft... idle aircraft burn more $$ than our MD-80's.

Joe continues to make the rounds in a desperate measure to garner support. He is gettng some support, but not nearly what he expected (IMHO). YX is quiet and civilized, and does things in a classy, non arrogant way. Joe has desperate written all over his face, He is grasping at staws saying NW will come back and take over MKE is FL does not take over YX. FL will add jobs to MKE.. yeah, temporary jobs, when he finds MKE may not support the traffic he predicts. Heard all kinds of empty promises from Airlines before...FL is no different. What can MKE do if this merger is successful, and he pulls most of the flights from MKE???? Not a darn thing!

[Edited 2006-12-18 22:47:54]
 
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TVNWZ
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 6:47 am

Quoting BH (Reply 77):
read that the both pilot unions were not taking a side on the issue, I believe they also said they were disappointed in the managments review of the proposal.

I imagine the pilots' unions would stay neutral. If FL bought them, they would have a lot more room for advancement since, right now, FL is a growing airline. Growing a lot faster than YX.

Quoting Quickmover (Reply 78):
I wonder if the real sticking point here is that YX upper management will lose their jobs.

Always a minor stumbling block, but the sticking point is the offer is just not good enough---yet.
 
BH
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 7:24 am

Quoting TVNWZ (Reply 80):
Always a minor stumbling block, but the sticking point is the offer is just not good enough---yet.

As you said "the offer is not good...yet" is very true. While there is a lot more involved in a merger it is almost like buying a house. You dont make your first offer your best and only one, unless someone else has an offer on the table, and right now FL is the only one pursuing YX.

I think it is safe to say that FL will make if not one, but serval more offers with increased prices before they would even attempt to go completely hostile and start buying up stock.
 
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 7:29 am

Quoting N917ME (Reply 79):
He is grasping at staws saying NW will come back and take over MKE is FL does not take over YX. FL will add jobs to MKE

I can't believe he would use the NW argument as leverage. NW has found that MKE as a focus city has not been profitable, and maintaining a hub-only presence has worked, and will continue to work.
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knope2001
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 7:32 am

Quoting Quickmover (Reply 78):
The Airtran press release today has some pretty compelling arguments from the employees point of view. The shareholders, of course, will have the final say. I wonder if the real sticking point here is that YX upper management will lose their jobs.

Today's press release was nothing more than they've said before. When I read the headline I thought that AirTran was going to make some sort of committment to bring more reservations center jobs here, or mechanic work here, or SOMETHING. But nothing other vague assertions that because they have added many jobs in the past *as a whole* and have more aircraft on order, that must mean more jobs for Milwaukee. W e a k. It matters zilch what AirTran has done in the past...nothing says that AirTran will expand employment in Milwaukee versus what Midwest has today.

Also lost in the shuffle is the type of jobs. What is certain to leave Milwaukee are the professional jobs that can and will be done out of Atlanta and Orlando. How does a dispatcher's salary compare to a part-time ramper hired off the street?

And finally, a word to the wise for any Skyway/Midwest Connect folks out there who are intruiged by AirTran's offer. AirTran has said clearly that regional jets and AirTran's revenue structure "don't work". Plain and simple. Top brass said in their investor presentation that Midwest Connect would stay, but that is just spin. These are the very same people who readily admit that RJ's don't work for them. So keep entertaining those pipe dreams of grandeur. Maybe AirTran will at least commit to give preferential hiring consideration to Skyway/Midwest Connect employees? That would be a more solid commitment to Milwaukee jobs than they are making now.
 
Cubsrule
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 9:20 am

Quoting Quickmover (Reply 78):
The Airtran press release today has some pretty compelling arguments from the employees point of view.



Quoting TVNWZ (Reply 80):
If FL bought them, they would have a lot more room for advancement since, right now, FL is a growing airline. Growing a lot faster than YX.

Something tells me that a merger with YX would pretty much quash FL's growth. FL is growing right now, but after buying YX, I can't see how they could possibly add many more jobs.
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airtran737
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 9:35 am

Quoting Cubsrule (Reply 84):
Something tells me that a merger with YX would pretty much quash FL's growth. FL is growing right now, but after buying YX, I can't see how they could possibly add many more jobs.

FL averages about 68 employees per airplane. With 60 more 737's coming that means that there is a need for 4080 future employees. YX doesn't have enough employees to cover that gap. Plenty of jobs for everyone except those corporate jobs that have already been talked about.
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mke717spotter
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 9:39 am

Quoting N917ME (Reply 79):
Expect a big announcement this week regarding the 50 seat RJ deal with Skyway.

That's great! If its true that is...which I hope it is. Did you hear something from the CEO or what?
Will you watch the Cleveland Browns and the Detroit Lions on Sunday? Only if coach Eric Mangini resigned after a loss.
 
quickmover
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 9:41 am

Quoting AirTran737 (Reply 85):
FL averages about 68 employees per airplane. With 60 more 737's coming that means that there is a need for 4080 future employees. YX doesn't have enough employees to cover that gap. Plenty of jobs for everyone except those corporate jobs that have already been talked about.

That's the point I was trying to make. FL has 60 jets on order, but YX has only 2. More jets, more people needed to fly them. They only need one CEO, however, and one of them really doesn't want to lose his job.
 
n917me
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 10:20 am

Quoting AirTran737 (Reply 85):
FL averages about 68 employees per airplane. With 60 more 737's coming that means that there is a need for 4080 future employees. YX doesn't have enough employees to cover that gap. Plenty of jobs for everyone except those corporate jobs that have already been talked about.

Yor forgot one major part to this..over the course of FIVE years.. Alot could and will change in FIVE years, especially in the airline industry. Tell me somthing that has not changed in the industry in the past 5 years that has not affected employees and/or growth.

Quoting Mke717spotter (Reply 86):
That's great! If its true that is...which I hope it is. Did you hear something from the CEO or what?

Internal email...and budget planning for 2007. Already have seen when new flights will start. If you are going to add flights and add/change aircraft types, it takes alot of advance planning for field stations, especially when a majority have a vendor ground handle them, and leasing gate/counter space from a vendor/airport.

[Edited 2006-12-19 02:24:28]
 
sideflare75
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 10:23 am

Joe can talk all he wants about keeping all the jobs except a few but that is simply not true. Why would he when alot of them will be duplicates to something AirTran already has in place?

Sure they will keep most of the people on the operational side. What about all the support people that work at HQ and the HGR and down at the Airport? They are all expendable. What will they do offer them jobs as rampers and call that keeping jobs?

Starting over at the bottom of someone elses payscale does not really seem like a good "opportunity" to me. Calling it "more opportunities for job advancement" is just another way of saying don't worry the only way you can go is up. How can anyone in their right mind think this is a good thing for a current YX employee?

This goes way beyond not keeping a CEO. It will go alot lower than that.
 
n917me
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 10:28 am

Q: Why did we turn down AirTran's offer?
A: After a careful evaluation that included a comprehensive analysis by
outside advisors, our board of directors determined our long-term
business plan as a stand-alone company will provide greater potential
for improving shareholder value going forward than AirTran's
proposal.


Q. What is going to happen next?
A. Since we turned down the proposal from AirTran, the ball is now in
their court. AirTran may continue their PR campaign in an attempt to
pressure the board of directors into accepting the proposal, they may
revise the proposal or they may take other steps.

Q. Is price the only consideration?
A. That decision is entirely up to our board of directors. However,
there are a number of considerations other than price that may be
taken into account, including the interests of stakeholders ?
shareholders, employees, customers and the communities we serve.

Q. Will the current AirTran situation affect our growth or future plans?
A. No, we are proceeding as planned. Under our business plan, we expect
annual growth of 10% for each of the next three years. This growth
will come from increased capacity due to our plans to add two
additional MD-80s, two additional 328JETs and our planned 50-seat
regional jet program.

Q. Why does AirTran want to buy us?
A. One reason is that AirTran acknowledges they have excessive capacity.
They have placed an order for 60 Boeing 737s, a multi-billion dollar
investment. But the fact is, they do not have profitable markets in which
to fly these planes. In 2007, they will take delivery of 20 737s and they
have been struggling to figure out what to do. AirTran knows we will
replace our MD-80s in the near future, and they think their
737s could fit the bill.
=
 
N353SK
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 10:28 am

Quoting AirTran737 (Reply 76):
The pilots are definately keeping an open mid to all of this which is evident by letting AirTran's VP of Operations come and speak to them.

That's probably because all of the Beechcraft Pilots know they're losing their jobs soon no matter what, since YX is phasing out the type.

Quoting N917ME (Reply 79):
Expect a big announcement this week regarding the 50 seat RJ deal with Skyway. EXPANSION for both YX and Skyway.

 crossfingers  ZW, please please ZW!  pray 
 
Mainland
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 10:58 am

Quoting BH (Reply 81):
I think it is safe to say that FL will make if not one, but serval more offers with increased prices before they would even attempt to go completely hostile and start buying up stock.

Quite possible. I feel what we're seeing now is AirTran playing the PR campaign to try and put external/shareholder pressure on the board since they know the board won't listen to them outright, and with the poison pill in place the only way to merge is with the approval of the board. If AirTran can get some backing from major shareholders, unions, etc., the door -- albeit the backdoor -- will be open. I'd bet AirTran is desperate enough, and if they think they have made some strides in getting these groups to take them seriously, they'll increase the offer to try and bring more on board.

Will it work? Anything is possible, but I think Midwest has a better argument with their

Quoting N917ME (Reply 90):
Q. Why does AirTran want to buy us?
A. One reason is that AirTran acknowledges they have excessive capacity.
They have placed an order for 60 Boeing 737s, a multi-billion dollar
investment. But the fact is, they do not have profitable markets in which
to fly these planes. In 2007, they will take delivery of 20 737s and they
have been struggling to figure out what to do. AirTran knows we will
replace our MD-80s in the near future, and they think their
737s could fit the bill.

This sounds far more compelling than the "Northwest will eat you alive" scare tactic that AirTran is using.
You don't need a passport to know what state you're in...
 
ATWZW170
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 11:16 am

I have tried to read as many of the opinions on this thread as possible but I think really it comes down to is the type of service that is being offered. FL is casual - YX is dressed up. MKE has come to expect a certain level of service, they want that. FL just isn't the same. I know they do offer some IFE but YX has DVD players, GREAT buy on board, and lets not forget the seats. I just don't see how a link of FL and YX will work.


As far as the 50 seaters go - I'm sorry but having an RJ isn't slapping anyone in the face. If the service is good - and I have to say, ZW has a number of FA's who go WAY above the customer expectations - it will be ok.

[Edited 2006-12-19 03:34:31]
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n917me
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 11:33 am

Quoting ATWZW170 (Reply 93):
ZW has a number of FA's who go WAY above the customer expectations - it will be ok.

You can say that again... I can think of two FA's that are great and YX would be lucky to have them represent us. (they commute on a regular basis) ZW also has some great pilots, got to know quite a few over the past year or so. I think if they get the contract for YX, there will be no problem keeping the service levels at the YX standard... they are just about there as it is
 
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knope2001
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 12:28 pm

Quoting AirTran737 (Reply 85):
FL averages about 68 employees per airplane. With 60 more 737's coming that means that there is a need for 4080 future employees. YX doesn't have enough employees to cover that gap. Plenty of jobs for everyone except those corporate jobs that have already been talked about.

Assuming that AirTran really adds those 60 737's and doesn't get rid of other aircraft, they will indeed have to add thousands of new jobs. However that doesn't say squat about M i l w a u k e e. Nothing says that any of those jobs will be in Milwaukee. It's virtually a given that Milwaukee will lose many administrative and professional jobs as a part of the merger. Right there AirTran needs to expand flying very significantly in Milwaukee just to break even on jobs.

And that assumes that AirTran will indeed grow by 60 aircraft. They don't seem to be finding many new places to make money with their new arrivals these days.

Oh, and when the first 15 or so 737's replace one-for-one the slightly larger M80's, how many jobs will that add in Milwaukee?

Quoting Daus (Reply 70):
Quoting Knope2001 (Reply 66):
They publicly said likely new markets from MKE include Raleigh, Buffalo, Orange County and Seattle. Buffalo-Milwaukee isn't big enough to support anything bigger than a Beechcraft, and Raleigh-Milwaukee isn't that much larger.

I think you have to keep in mind that these markets are probably not envisioned for just O&D MKE traffic. As a AirTran hub, MKE would get these flights as a way of enabling true East Coast/West Coast traffic that AirTran today can't do without sending people through Atlanta. Instead of Midwest Connect feeders from Grand Rapids into MKE you have to picture AirTran 717's from Buffalo/Ralaigh.

Local traffic is vital to making money, and these markets are very thin. Milwaukee-Buffalo, for example, carried on average about 28 passengers per day total (14 each way) in the most recent quarter reported. A single 717 round trip is 234 passengers. With just one flight per day AirTran would probably not get more than 60-75% of the market (even with the only nonstop). Even if low fares stimuate this local market 100%, that's still a h u g e number of connecting passengers that BUF-MKE would need to carry. Connecting traffic brings in low yields, especially since AirTran would almost certainly have to underprice a market like BUF-MKE-SEA when it is just one flight per day and the competition includes Southwest and JetBlue.

All the talk of new employees and explosive growth at Milwaukee conveninently ingores the fact that Milwaukee is just not a large enough market to absorb anywhere near the growth proposed.
 
Cubsrule
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 1:29 pm

Where exactly does FL plan to put those 50 73Gs? I asked a while ago about their growth strategy, and no one has yet articulated it. I'm still curious...
I can't decide whether I miss the tulip or the bowling shoe more
 
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knope2001
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RE: AirTran Proposes Merger W/ Midwest Air II

Tue Dec 19, 2006 11:21 pm

I don't recall exactly which post referred to Midwest continuing to shrink as opposed to AirTran's rapid growth, but one of my to-do things on this board was post the growth (revenue passenger miles) for Midwest in the past few years.

year-over-year comparison

2006 +21.7% (through November)
2005 +33.5%
2004 +16.7%
2003 +9.1%
2002 -0.4%
 
Mikey711MN
Posts: 1253
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RE: AirTran Proposes Merger W/ Midwest Air II

Wed Dec 20, 2006 12:28 am

Quoting Knope2001 (Reply 97):
...the growth (revenue passenger miles) for Midwest in the past few years.

year-over-year comparison

2006 +21.7% (through November)
2005 +33.5%
2004 +16.7%
2003 +9.1%
2002 -0.4%

Using these numbers above, can we say that the bulk of Midwest's growth be due, in large part, to the expansion of Saver Service, which was introduced back in '02 or '03?

So even within YX, what is the future of the much ballyhooed Signature Service, much less in a merger scenario with FL?

-Mike
I plan on living forever. So far, so good...
 
Mikey711MN
Posts: 1253
Joined: Fri Nov 07, 2003 4:19 am

RE: AirTran Proposes Merger W/ Midwest Air II

Wed Dec 20, 2006 12:29 am

Quoting Cubsrule (Reply 96):
Where exactly does FL plan to put those 50 73Gs? I asked a while ago about their growth strategy, and no one has yet articulated it. I'm still curious...

Because it bears repeating......

(personally, I'd like someone who believes that a teardown of the MKE hub would be imminent upon a YX/FL merger to address this question)
I plan on living forever. So far, so good...

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