grasshopper

Hey gang...what do you see in the crystal ball with regards to AirTran post Midwest mess? Long term?

Thanks!

SherpaLifter

The Good: We have 65 B-737-700's to be delivered over the next 5 years. Profitable every year since 2001 (only airline beside SWA that has consistently made money since (9/11). Debt is relatively low and non-fuel CASM is best in industry which means we can compete well even in a down economy. Any change to age 60 retirement age will have little impact here.
Marketing seems to know what they are doing, which is a very good thing. Long term prospects are as good as anyone else's if we can remain independent and grow outside of ATL. Balance sheet is strong (for an airline) and profits continue to be forecast through next year.

The Problems: Anyone hired in the last year will not upgrade to captain without further aircraft orders. Expect to be in the right seat for a long time. We are out of gates in ATL. That means we have to find other cities to fly the 65 aircraft to and from. The Midwest deal offered a good solution to developing a non-ATL hub. However, you never want to overpay in any deal so maybe it's a good thing it failed. Union leadership has failed the pilot group in the current round of negotiations and the company has taken advantage of all the turmoil. Look for a recall of the union pres/vice pres to be successful. New TA (or TA2 as it is being called) is not much of an improvement. I bet it fails as well if they ever put it out for a vote. Junior pilot group would not fair well if we were to be acquired by another carrier.

grasshopper

Thanks Sherpa! That was exactly the kind of info I needed. Any speculations that they will be bought?

Boogie Nights

I do not think this deal is over yet........


"American Antitrust Institute president Albert Foer says: "I don't see how Northwest can invest 'passively' in a rival." Raymond James & Associates analyst Jim Parker suggests Northwest is only using TPG as "a front" to buy Midwest and keep AirTran's low-fares competition out of its home region. "



JP Morgan analyst Jamie Baker suggests AirTran does not need Midwest and will seek larger deals within the next two years. AirTran had tried in late 2004 to buy ATA Airlines and its Chicago Midway hub, but private equity firm Matlin Patterson instead purchased the carrier in a deal including codeshare partner Southwest Airlines

Midwest Airlines sale could lead to merger


McClatchy Newspapers
Published Monday, August 20, 2007

MILWAUKEE - Midwest Airlines will continue to fly solo with its impending sale to an investors group, but the transaction might eventually deliver Milwaukee’s hometown airline to another company with a less-appealing reputation.
Northwest Airlines Corp. could eventually take over Midwest Air Group Inc., corporate parent of Midwest Airlines and Midwest Connect, for Midwest Air’s new owner to cash out its investment, it was disclosed Friday.
Northwest is part of an investors group, organized by TPG Capital, that has agreed to buy Midwest Air for $17 a share, or $450 million. That sale, announced late Thursday night, requires shareholder and regulatory approval and is expected to close by the end of the year. The sale to TPG Capital, a private equity firm based in Fort Worth, Texas, will allow Midwest Airlines and Midwest Connect to keep their identities as independent carriers, said Timothy Hoeksema, Midwest Air chairman and chief executive officer



I read yesterday but can't find an arcticle from TPG saying the investment group could be looking at a cash deal for their part of Midwest, leaving NWA with ownership. This buyout was obiviously a veiled takeover by NWA to keep AIRTRAN out. This still has to pass antitrust test.
I think the dicision is not in. If I had it I would sell MEH while it is high because if this does not pass the antitrust then it may become a fire sale.

GuardDawg14

How long do you think it will take to upgrade nowadays???

rvr350

In the schoolhouse, they'll tell you upgrade expect to be less than 3 years (yeah, right), but optimistically, i'd give 5-6 years if you're hired this year.

FliFast

Boogie,

Good posting and good info. But rhetorically, if Air Tran bought Midwest how would that pass the anti-trust test ?

Thx,

FF

320ToBearz

Boogie,

So SWA "passively" invests in ATA, at a time when ATA was larger than Midwest, with a private equity firm at a much larger airport MDW, but NWA cannot? Yeah right.

In addition, Oberstar is from which state? Sen. Kohl likes the fact that Midwest is independent.

CarlSpackler

Midwest ain't gonna happen in any capacity. AirTran will continue smart growth and "hopefully" open new domiciles soon. Merging with another company is possibly in the cards though. Frontier has been mentioned about 1000 times. That one would take a lot of work though. Gotta get rid of the bus and put 73's in it's place. There goes our 65 more airframes and growth slows at the tranz. As a junior FO I hope we go it alone. That's the best chance for upgrade and QOL. My crystal ball caught a cold as of late so who the F knows.

First item on the agenda is to vote HELL NO for the newest, newest, newest TA.

grasshopper

Thanks Carl and rvr...good info...good luck on taking down the new...err...newest TA!