Midwest's Next Round With AirTran - 7/16/2007

KarlB737 · Mon Jul 16, 2007 7:47 am

I know what you are thinking. So I won't even state it. I thought this acquisition attempt was over. Everytime I think that a new meeting between Midwest and AirTran surfaces. I don't know what the magnet is within Midwest that AirTran visions but maybe you do. Well here are the latest details:

Courtesy: Associated Press

AirTran To Make Case For Midwest Buyout

"AirTran Chairman and Chief Executive Officer Joe Leonard said the Orlando-based operator of AirTran Airways will dispel rumors about its buyout offer -- AirTran does not, for instance, plan job cuts at Midwest's Milwaukee headquarters. He and other executives will make a presentation and take questions over a three-hour period, when tensions could run high, he said."

Full Story:

http://biz.yahoo.com/ap/070715/midwest_airtran.html?.v=3

JBo · Mon Jul 16, 2007 8:01 am

Quoting KarlB737 (Thread starter):
I thought this acquisition attempt was over. Everytime I think that a new meeting between Midwest and AirTran surfaces

A new meeting? There haven't been any meetings until now.

I have a feeling this thread will die into a flamewar before 20 replies. So please, let's save the flamewar for the meeting on Monday. Big grin

CitrusCritter · Mon Jul 16, 2007 9:46 am

This meeting has been scheduled since the stockholder's meeting. Nothing "new" about it really. The outcome of it will be news either way, though.

travatl · Mon Jul 16, 2007 9:57 am

Quoting JBo (Reply 1):
I have a feeling this thread will die into a flamewar before 20 replies. So please, let's save the flamewar for the meeting on Monday.

Ditto - acutally, we should save it for the "he said, she said" PR releases that will go back and forth within hours after the meeting.

National757 · Mon Jul 16, 2007 10:09 am

Speaking of Midwest, they took down the Save The Cookie shirts off their website! I wanted to buy one..grrr. Anyone know where I can find one?

mke717spotter · Mon Jul 16, 2007 10:10 am

I've got a question, is Tim one of the members of the YX board? If not, does he really have any say in how this all comes out or not? Aside from that, I think it'll be hard for FL to persuade 2 other board members because the board has already heard about FL's proposal and plans for the merged airline and have consistently been against it.

N822ME · Mon Jul 16, 2007 10:42 am

Quoting Mke717spotter (Reply 5):
I've got a question, is Tim one of the members of the YX board?

Yes, he is.

SkyexRamper · Mon Jul 16, 2007 12:23 pm

Quoting KarlB737 (Thread starter):
AirTran does not, for instance, plan job cuts at Midwest's Milwaukee headquarters.

That's not true...hehehe.... Big grin

They would be the best possible job cuts the company ever did! I can name at least 2-3 jobs that would be cut.

Quoting KarlB737 (Thread starter):
He and other executives will make a presentation and take questions over a three-hour period, when tensions could run high, he said."

Look up Timmy's address, I'm sure they'd meet there since they are try ever so hard to keep the meeting location a secret. The cookie palace is too obvious, though the only normal place to hold it. Maybe the meeting won't even take place in MKE or ATL.

N822ME · Mon Jul 16, 2007 12:29 pm

Quoting SkyexRamper (Reply 7):
They would be the best possible job cuts the company ever did! I can name at least 2-3 jobs that would be cut.

It's comments like this that really frustrate me. Such animosity within our company. I would never wish you to lose your job, yet you think those of us further south on Howell should.

SkyexRamper · Mon Jul 16, 2007 12:37 pm

Quoting N822ME (Reply 8):
I would never wish you to lose your job, yet you think those of us further south on Howell should.
Is your name Timmy, Carol or anyone else in super high management that doesn't have time or even care to touch base with the people who keep their butts employed? Working out at the hub is much different that working in air conditioning at a desk. The world of YX is heavily divided, mostly by College Ave, ask any of the front line employees.

Internal employees are not the only ones who see that...other airlines know it too. So unless you'd like to go down the hall to Timmy's office and tell him to strap on some steel toed boots and a safety vest to help us out and learn how the airline really works. Management of both companies had their chances to appreciate our hard work day in and day out but they dropped that ball a long time ago. Also last time a CEO tried to help, Jim Rankin, he almost killed himself. Guess the higher ups know better. Buying us cheap cake and horrible food, of which is only served on one day, when they offer, so if you don't work, you don't get squat. You can't bribe your labor force when we have no say is the company or how we could be doing our jobs better.

[Edited 2007-07-16 05:46:47]

ca2ohHP · Tue Jul 17, 2007 2:48 am

Quoting SkyexRamper (Reply 9):

If it's that bad leave...good grief.

RJNUT · Tue Jul 17, 2007 3:35 am

I am very interested in YX News these days and read all the posts, but i skip SKYEXRAMPER'S posts , as they give me little insight other than that of huge disgruntlement!

SkyexRamper · Tue Jul 17, 2007 3:53 am

Quoting RJNUT (Reply 11):
, as they give me little insight other than that of huge disgruntlement!

There are at least two other people in this forum that will agree with my insider views. Also if you can't handle the truth about your beloved Midwest, then the cookie palace brainwash has taken effect. Also if you asked any of our pilots, they'd be quick to agree also. Truth hurts a lot of you guys, which I'm sorry, but except the truth.

deltadawg · Tue Jul 17, 2007 4:36 am

Nothing new out of this so far!

Who will fire the first volley - FL or YX?

FL - "they refuse to listen to us"
YX - "we're not for sale because your offer isn't good enough - go back and throw in our compensation"

I can hear it now.

quickmover · Tue Jul 17, 2007 4:40 am

Quoting DeltaDAWG (Reply 14):
Who will fire the first volley - FL or YX?

FL - "they refuse to listen to us"
YX - "we're not for sale because your offer isn't good enough - go back and throw in our compensation"

I can hear it now.

Unless something unexpected happens, I'd say you're right.

Maybe they are still talking. If there was no movement at all on either side, I would think the P.R. releases would be flying by now. Surely there are reporters in MKE, just waiting to pounce after the meeting adjourns.

ca2ohHP · Tue Jul 17, 2007 5:02 am

Quoting Skyexramper (Reply 12):
Truth hurts a lot of you guys, which I'm sorry, but except the truth.

Truth in your eyes. Some of the things you mentioned I see as enormous goodwill gestures on management's part. You had a CEO work on the ramp? Unheard of anywhere else.

SkyexRamper · Tue Jul 17, 2007 5:13 am

Quoting Ca2ohHP (Reply 16):
You had a CEO work on the ramp? Unheard of anywhere else.

Not true....Herb and David, of Southwest and JetBlue respectively, were famous for helping out and knowing the jobs of their employees. Baby sitting a CEO that has no business being out there working the flights is very dangerous to himself and everyone around him. But actually it slows us down when the pace isn't fast enough. Management trying to patch up their neglect isn't worth it. Oh yeah...the last time I ran into Timmy, he was going to OMA, he couldn't even give me the time of day. Just a simple "Thank you Sir". I didn't have to help him with his bag as I do with every other passenger. "Keep up the hard work" would have been a much better statement. Outsiders will never understand something they don't deal with first hand.

ca2ohHP · Tue Jul 17, 2007 5:23 am

Quoting SkyexRamper (Reply 17):
Outsiders will never understand something they don't deal with first hand.

Outsiders in reference to YX maybe, but I definately understand the difference between effective management and poor management. WN, B6 and CO are known for treating their employees as company assets, not liabilities. Sad to see YX isn't included in that short list.

SkyexRamper · Tue Jul 17, 2007 5:26 am

Quoting Ca2ohHP (Reply 18):
Sad to see YX isn't included in that short list.

Yes, especially how much they hype their slogan and all their #1 ratings. They talk way too much and never follow up with hard evidence.

davidlc3 · Tue Jul 17, 2007 5:45 am

Quoting Ca2ohHP (Reply 16):
Unheard of anywhere else

At JI our #2 was well known on a first name basis all over the ramp. When things would get too crazy he'd go throw a few bags on the ramp and get to know the folks on the other side of the belt.

Not loved by all but he did his best to get his hands dirty from time to time.

KarlB737 · Tue Jul 17, 2007 7:00 am

Quoting SkyexRamper (Reply 7):
I'm sure they'd meet there since they are try ever so hard to keep the meeting location a secret.

"Management of AirTran Holdings Inc. met with Midwest Air Group Inc.'s board of directors Monday in Milwaukee to present its case for a merger between the competing airline operators."

This is all I can find on the subject at this hour. It has been pretty quiet.

AirTran Management Makes In-Person Pitch To Midwest Board

http://biz.yahoo.com/bizj/070716/1491905.html?.v=1

TVNWZ · Tue Jul 17, 2007 7:28 am

Joe Leonard will be outlining what he told the Midwest board at noon tomorrow at the Rotary Club. they meet at The War Memorial. Drop by.

moman · Tue Jul 17, 2007 7:41 am

Quoting KarlB737 (Thread starter):
"AirTran Chairman and Chief Executive Officer Joe Leonard said the Orlando-based operator of AirTran Airways will dispel rumors about its buyout offer -- AirTran does not, for instance, plan job cuts at Midwest's Milwaukee headquarters. He and other executives will make a presentation and take questions over a three-hour period, when tensions could run high, he said."

Yeah right. Air Tran should consolidate the HQ operations or they will be too expensive and the merger won't be worth it.

IN other news, I think AA should buy YX. They could really use the 717s and I can see the operations fitting in very nicely with each other. Plus AA can cut the HQ staff and move everyone down to DFW, have MKE/MCI focus cities, and use the 717s to replace some of the old Fokker routes. This will also push AirTran back a bit, which seems hell bent on competing head to head in STL, DFW, and other cities.

n917me · Tue Jul 17, 2007 8:05 am

David should have spent more time behind his desk and maybe he would not have been ousted as CEO.

isitsafenow · Tue Jul 17, 2007 9:38 am

Quoting MoMan (Reply 22):
I think AA should buy YX. They could really use the 717s and I can see the operations fitting in very nicely with each other.

Tell us you're kidding...
safe scratchchin

CitrusCritter · Tue Jul 17, 2007 10:37 am

Quoting MoMan (Reply 22):
Yeah right. Air Tran should consolidate the HQ operations or they will be too expensive and the merger won't be worth it.

It doesn't say they're going to keep MKE open. Maybe they are planning to offer them all jobs in MCO or ATL? Maybe this is a sign that Joe recognizes that FL can learn a lot from YX about on-board product, brand loyalty etc.

PExDCA · Tue Jul 17, 2007 3:13 pm

Quoting MoMan (Reply 22):
I think AA should buy YX. They could really use the 717s

Yeah, they need the 717's like a hole in the head. If they really thought there was a need they could have kept the TW ones they got rid of. And why would they invest in a fleet of planes for which there is no possibility of expansion?

mke717spotter · Tue Jul 17, 2007 3:23 pm

So has anything come out of this meeting? FL is saying it was "encouraging", while YX is saying that FL told them nothing new or surprising at the meeting.

TVNWZ · Tue Jul 17, 2007 10:35 pm

You don't have to eat lunch with the Rotary to see the presentation. It's here....

http://phx.corporate-ir.net/phoenix.zhtml?c=88626&p=irol-sec

Nothing new that I could see.

SkyexRamper · Wed Jul 18, 2007 12:43 am

Ch. 12's newsite:

http://www.themilwaukeechannel.com/money/13694467/detail.html

MILWAUKEE -- Air Tran's chief executive officer will be in Milwaukee Tuesday to discuss a possible takeover of Midwest Airlines.

Joe Leonard will be at Memorial Hall at 12:40 p.m. Tuesday to talk about Air Tran's vision for Midwest Airlines, how service would change, and what the new ownership would mean to the community.

The Midwest Airlines board of directors sat down with Air Tran officials Monday. So far, the board has rejected Air Tran's increasing buyout offers. The latest offer is valued at $389 million.

Midwest's board discribed Monday's meeting as a listening session. They said at this point they do not intend to accept Air Tran's offer.

SkyexRamper · Wed Jul 18, 2007 12:45 am

Quoting SkyexRamper (Reply 29):
They said at this point they do not intend to accept Air Tran's offer.

That sure sounds like Timmy is thinking there might be good in the deal. What is Timmy's payout should this go through?

quickmover · Wed Jul 18, 2007 1:11 am

Well, they said no again.
The only way this deal happens before the next annual meeting is alot of behind the scenes lobbying on two of the six old MEH directors. You would have to believe some sort of consensus could be reached with just two people. If their concerns are addressed, they will have 5 board votes and this deal gets done.

DAYflyer · Wed Jul 18, 2007 1:19 am

The people who run YX is one stubborn lot. They must think thier little airline has the value of AA or something.

antoniemey · Wed Jul 18, 2007 2:05 am

Quoting PExDCA (Reply 26):
Yeah, they need the 717's like a hole in the head. If they really thought there was a need they could have kept the TW ones they got rid of. And why would they invest in a fleet of planes for which there is no possibility of expansion?

Umm... AA dropped the TW 717s because they already had a much larger fleet of Fokkers. Unfortunately for AA, circumstances forced them to retire the Fokker fleet without an adequate replacement for them. AA Still lacks a decent 100 seater aircraft.

Would they likely nab an airline as a merger partner just to get a handful of 717s? No. But that doens't mean they couldn't use an aircraft in that size class.

SkyexRamper · Wed Jul 18, 2007 2:06 am

Quoting DAYflyer (Reply 32):
The people who run YX is one stubborn lot. They must think thier little airline has the value of AA or something.

Nah, they think they're the next Continental or something...from bust to best.

Mainland · Wed Jul 18, 2007 2:35 am

Quoting SkyexRamper (Reply 30):
What is Timmy's payout should this go through?

If I've got the tally from SEC filings right, Hoeksema stands to walk away with just over $6.5 million from severance/change in control provisions in his employment contract. This is, of course, on top of any cash/shares payouts he would receive for MEH shares he owns if the merger were to go through.

National757 · Wed Jul 18, 2007 2:44 am

Quoting DAYflyer (Reply 32):
They must think thier little airline has the value of AA or something.

You mean it doesn't?? That's news to me Wink

KarlB737 · Wed Jul 18, 2007 4:11 am

Here is some more info on this encounter yesterday.

"The board appreciated the information that was shared," says Midwest spokeswoman Carol Skornicka. "It was more detailed that what we'd received previously, but the essence of the proposal hasn't changed."

AirTran Wants Midwest Deal In Works By Aug. 10

http://biz.yahoo.com/bizj/070717/1491905.html?.v=2

TVNWZ · Wed Jul 18, 2007 4:11 am

Quoting DAYflyer (Reply 32):
They must think thier little airline has the value of AA or something.

No, but Joe Leonard sure is. What a fight for 25 717's.

DAYflyer · Wed Jul 18, 2007 4:38 am

Quoting TVNWZ (Reply 38):
What a fight for 25 717's.

Yeah no kidding.

Read another article on this that both sides are talking a bit, and that no news at this point is good news according to the analyst. Both sides are afraid that if they say too much it will embolden the other side.

CitrusCritter · Wed Jul 18, 2007 4:40 am

Quoting TVNWZ (Reply 38):
No, but Joe Leonard sure is. What a fight for 25 717's.

If you honestly think Joe is trying to spend nearly $400mn for 25 717s, you are sadly mistaken. There are 717s sitting in the desert which FL could have if they wanted, and they declined an option they had for many more before Boeing shut the plant. They have plenty of aircraft coming online in the next few years.

This merger is to give FL a major market in the Midwest. When they look around, they see legacy carriers and/or WN at every major city in the Midwest...except MKE. MKE is unique because it has a small, hometown airline that dominates the market. Their goal is to take out YX and step into its place. Will they do that perfectly? No. Will they still have less competition and larger market share than trying to fight their way in to STL, MSP, or someplace similar. That is the purpose of this merger. It also helps that YX has some nice stations that FL won't have to open on their own. The 717s are simply a nice bonus because it won't be as hard to integrate the fleet, though the YX 717s do need upgrades to be brought up to the standard of FL's 717s from an operational point of view.

DAYflyer · Wed Jul 18, 2007 4:50 am

Quoting CitrusCritter (Reply 40):
though the YX 717s do need upgrades to be brought up to the standard of FL's 717s from an operational point of view.

Really? Wow, the way some people on this forum speak of them you would think YX's birds were like gifts from the gods or something. Yeah sure

Seriously, what type of upgrades would they require, and how much would it cost per airframe, considering they are now out of production?

quickmover · Wed Jul 18, 2007 4:52 am

Quoting CitrusCritter (Reply 40):
If you honestly think Joe is trying to spend nearly $400mn for 25 717s, you are sadly mistaken.

I would also add that Midwest leases their 717s from Boeing capital. FL would only be taking over the lease payments, so in reality, Midwest doesn't have the 717s to sell anyway. I've never understood all this worry and talk about closing down MKE and MCI, when those two hubs are the only reason to buy the company.

davidlc3 · Wed Jul 18, 2007 4:56 am

Quoting CitrusCritter (Reply 40):
That is the purpose of this merger

FL will bill MKE as "Chicago Area" just like they do in a lot of secondary areas. MKE is closer to many of the northern burbs than ORD or MDW. It's their retaliation for getting messed out of the MDW slots that WN bought through ATA.

As for YX....they are very truly, deeply steeped in their own culture and heritage. Even though some of the "family" angle has tarnished over the years they are still like a cult...in a good way. Getting a job with them can yield as many as a dozen interviews to check the emotional fit of the candidate with the airline. In many ways it is the way we all wish airlines could operate...but not in all ways.

The YX insiders feel this deal is imminent and I tend to agree. With YX moving to a 2 cabin a/c they will not look that much different from FL anyway.

airtran737 · Wed Jul 18, 2007 5:01 am

Quoting DAYflyer (Reply 41):
Seriously, what type of upgrades would they require, and how much would it cost per airframe, considering they are now out of production?

YX unlike FL has not invested the money tot make their 717's CAT III. That would be the first change. You also have to remove galleys from YX's 717's, add an oven to the FL birds (if they keep their warm cookie promise), reconfigure the YX seats, and remove any excess storage that YX has on board. IIRC there was something at some point where FL said it would cost 10 million dollars to get everything standardized.

Oh yeah, those bad boys are going to need a nice "a" on the tail as well which means a trip to the Avborne paint shop in MIA

davidlc3 · Wed Jul 18, 2007 5:04 am

Quoting AirTran737 (Reply 44):
Oh yeah, those bad boys are going to need a nice "a" on the tail as well which means a trip to the Avborne paint shop in MIA

would be better than the squished bug on YX's tail....the rest of their paint job is classic but the logo just doesn't hit it with me.

Boeing7E7 · Wed Jul 18, 2007 5:27 am

Quoting DAYflyer (Reply 32):
The people who run YX is one stubborn lot. They must think thier little airline has the value of AA or something.

Why would anyone want to work for a company that is only interested in the bottom line vs. a company that is focused on product? That's not being stubborn.

CitrusCritter · Wed Jul 18, 2007 5:52 am

Quoting Davidlc3 (Reply 43):
FL will bill MKE as "Chicago Area" just like they do in a lot of secondary areas. MKE is closer to many of the northern burbs than ORD or MDW. It's their retaliation for getting messed out of the MDW slots that WN bought through ATA.

Sure, it's obvious that FL wanted MDW. They think MKE is the best opportunity out there since they missed out on MDW. I can't say that I really disagree. Look at what I wrote earlier -- MKE is very unique in that it is not dominated by a large legacy carrier (or WN). It is dominated by a carrier that can be bought out. Why wouldn't they take this opportunity?

JBo · Wed Jul 18, 2007 5:55 am

Quoting Davidlc3 (Reply 43):
With YX moving to a 2 cabin a/c they will not look that much different from FL anyway.

YX isn't moving to a 2-cabin aircraft. It's a single cabin aircraft with two kinds of available seating. Some will argue that it's the same thing, but it's not because all seats are sold as coach ... there will be no separate business or first class ticketing

sllevin · Wed Jul 18, 2007 6:14 am

YX management is playing with fire at this point. With at least 60% of the ownership of the company preferring to take the Airtran offer, if this deal collapses, they will have a LOT of explaining to do, and a lot of lawsuits to fight.

There's a significant chance that YX stock will drop back to $10 without the buyout offer, and during the past six months precious little of the YX management's skill at improving things as a standalone airline have surfaced. It's very unclear that the YX management can actually drive the stock to a much higher value.

In general, though, this event has certainly taught me a thing or two; specifically, never to invest in a Wisconsin-incorporated company. The fact that the management of such companies can run them independent of the ownership (stockholders) is something I had never been aware of.

Steve

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