A319s to Midwest?
 

New Midwest Airlines owner to cut 100 local jobs

By Tom Daykin of the Journal Sentinel

Posted: Aug. 14, 2009 2:38 p.m.

Midwest Airlines Inc. will cut about 100 jobs from its Milwaukee-area workforce, a reduction of about 9%, company chief executive officer Bryan Bedford said Friday.

Most of the job cuts from Midwest's Oak Creek headquarters and operations at Milwaukee's Mitchell International Airport are back-office and administrative positions that duplicate jobs at Indianapolis-based Republic Airways Holdings Inc., which completed its $31 million purchase of Midwest on July 31.

"We've got to make the airline highly efficient," Bedford said.

The jobs that remain intact include mechanics at Midwest's maintenance hanger, gate agents and ground crews at Mitchell International, and customer service representatives at the headquarters and reservations center, 6744 S. Howell Ave.

Many of those employees are needed because Republic's main business is operating commuter flights for Delta Air Lines Inc., United Airlines and other major carriers. As a result, Republic doesn't have a customer service department, marketing department and other operations used by the carriers that hire Republic.

The cuts of about 100 positions will leave Midwest with around 1,000 local employees, Bedford said. Midwest has around 1,600 employees, with 1,100 employees locally, he said. Employees who are laid off will receive severance packages, he said.

Around 160 employees are receiving layoff notices, Bedford said.

But some of those employees, including mechanics, are being offered positions with Republic Airlines, one of the airlines owned by the parent corporation, Republic Airways Holdings, he said. He said those employees were notified to make sure the company complies with the law requiring 60-day notices for layoffs.

Still up in the air is the fate of over 250 Midwest pilots and flight attendants who are represented by the Air Line Pilots Association and Association of Flight Attendants.

Those unions are negotiating with the International Brotherhood of Teamsters, which represents union flight crews at Republic, over combining seniority lists of union flights crews from Republic and Midwest.

Meanwhile, Republic plans to add more flights to Midwest's schedule, which should create more jobs, Bedford said. Republic has already restored Midwest flights from Milwaukee to Louisville, Ky., and Los Angeles.

There also will be a change in aircraft, with Midwest dropping its nine 99-seat Boeing 717 jets, to be replaced by nine 99-seat Embraer 190 jets. Under Republic's ownership, Midwest's fleet will include a dozen 76-seat Embraer 170 aircraft, and 12 regional jets with 37 to 50 seats.

Also, Republic on Thursday emerged as the winning bidder in a bankruptcy auction for Denver-based Frontier Airlines. Bedford said some of the 138-seat Airbus A319 jets used by Republic will likely be shifted into service for Midwest flights to West Coast destinations.

How nice, it all works so nicely.

This industry stinks.

I wouldn't get to worked up about this. There is current language (that must be voted on) that will prevent this and or will result in a recall of current F9 pilots

It will be done by a codeshare. By January there will be enough flying out of MKE with the Airbus that they will make it a base. More of the Midwest flying being outsourced and replaced. Where do the Midwest pilots fit in?

Well, be careful watch you wish for. Within a day or two, RAH is shifting flying out west to a cheaper group of pilots. No sort of labor agreement in place, and no pay agreements in place either. Good luck. We are all big losers in this because the fight for DEN just got more intense, which means lower profits for all.

it is just SAD!!!!!:mad:

Question to me is where does DAL play in to all of this. Something stinks in IND!

DAL doesn't.

TPG owned and had a controlling 53% of Midwest. NWA, which became a Delta subsidiary with the merger, owned 47% of Midwest, but was restricted from operational contraol. That 47% stake was written off prior to the sale to RAH. The terms of the TPG deal required TPG to be made whole prior to any return for NWA. TPG sold 100% of the equity to RAH. As of July 31, NWA, now DAL owns none of Midwest.

Midwest places their code on Delta flights. Delta code is not placed on Midwest flights.

While the situation stinks for Midwest, it has and had nothing to do with Delta.

They wrote the investment off, does that mean they gave up the control too?

Does that mean that DAL would/ could buy parts and or all of RJET to gain the DEN and MKE markets?

The press releases don't always match the SEC filings. As I understand it TPG is retaining a 7.8% (?) investment and a seat on the board? It's all so incestuous that there's no way to know what might still happen, and who still has their hands in the cookie jar.

Doesn't the contract come with the pilots? Even if BB did want to put RAH pilots on the Airbus there would have to be new rates negotiated. I don't think there will be cheaper pilots flying the Airbus. The F9 guys will fly the Airbus under their current rates until a new CBA is negotiated.

If that is the case I wonder what might happen to Spirit since we are owned by TPG and Oak Tree. Not trying to start a rumor but it is very interesting if its true.

You guys do realize that this is not going to take place tomorrow. Once the lists are merged and we are one company, those planes can be placed anywhere. The terms of the integration will determine who will fly those planes (F9 pilots). I know this will be very difficult to come to terms with, but the Midwest flying is RAH flying. The Midwest pilots will be on the RAH list. This will not be outsourcing to put an airbus on those routes.

As for original poster; do they not treat you that well at Southwest? You seem extremely bitter and want nothing more than to see bickering between those who are still involved in this deal. Ive always had a great experience dealing with SWA people. All very professional and curteous. Why are you stooping to such a low level?

why are you fly guy? The original poster, posted an article for informational purposes. There was no Flame, heck, he added no commentary whatsoever. Unlike 90% of the posts here, he actually posted relevant information, not conjecture or innuendo. Kind of what is supposed to be going on here. But you somehow take it personally and turn it, and him into a target...classy!

Not the same. With Indigo as controlling investor there is a much larger set of goals that they have in mind.

Yes, smells like low tide.

Although diversification is a smart move if Republic thinks their major partners are unwilling, or incapable, to continue their contractual performance.

I disagree.

If you have ever owned a stock or bond that hits financial trouble you would know that you own your shares until bankruptcy. Midwest never declared bankruptcy. Delta can take "tax" write-offs, but unless you sell or give the shares to someone you still own 47%.

TPG as a private company has started 5-6 private partnership LLC... TPG Midwest Gen Par LLC, TPG Midwest Partners V LLC, TPG Midwest USA LLC, TPG Midwest Internatioonal LLC, ...

Everyone talks like Republic bought Midwest. But if you read the Republic - TPG deal it is a "Merger" not a purchase. TPG Midwest and Republic merged companies with the TPG owners getting a board sit at Republic.

It's all in the fine print

The TPG/NWA/Delta/Republic deal has been hidden behind closed doors because the majority owner is a privately held company. I think the truth of the TPG/NWA purchase is still untold.

That is what I have been thinking. I have though that since DAL/NWA wrote off the investment the whole thing has started to stink.

That is how I understood it. You may write the loss off but you still control the stock, etc.
DAL had to have knowledge and IMO give consent for the transaction to take place.
To me that means DAL has their hands all over the RJET actions as of late. It is all a little too cozy.
Some think that DAL is going to buy Rjet, some think that the 175's of Rjet are going to come to CPS/DAL, some think that CPS is going to be sold to Rjet.
All the while the MEC chair thinks/states that Republic is not going to be a DCI carrier much longer.
This is the stuff that does not have decent implications, I do not care how you slice and dice it.

If it's merger, doesn't that give the YX folks a leg up from being assimilated? $450M loss in, what, 2 years? Yea...I dunno. I don't think we've seen the last act of the DAL/NWA/TPG/MEH saga.

You speak as if you have read the fine print. If so, CITE YOUR SOURCE, otherwise its a flawed opinion.

Happy to see some people agree with me. TPG/NWA don't spend $450 million to block AirTran, write-off over $400 million in losses and then give the keys to a large regional airline for $31 million.

Just write-off the last 6.8% and be done with it.

The reason Independence Air failed was that they lost to much money building a market. Republic is being handed the MKE market with 25 years worth of loyal customers, a marketing department, reservations system, gates, slots into LGA-DCA, ...

Why help Republic become a national airline?



guess:
1. to make a low cost competitor for AirTran that feeds the Delta system.
2. build a new regional feeder system to get around the 76 seat scope language

I'm just a pilot, but I can read the new SEC reports being released by Republic. The closed doors are coming open because Republic is a public company.


-------------------------------------------------------------

Item 2.01


On July 31, 2009, pursuant to the terms of the Agreement and Plan of Merger, dated as of June 23, 2009, among Republic Airways Holdings Inc. (the “Company”), RJET Acquisition, Inc. and Midwest Air Group, Inc. (“MAG”), as amended (the “Merger Agreement”), RJET Acquisition, Inc. merged with and into MAG (the “Merger”)

---------------------------------------------------------------

Upon consummation of the Merger and pursuant to the Investment Agreement, on July 31, 2009, the Board of Directors of the Company voted to increase its size from five to six members and appointed Richard P. Schifter, a managing partner at TPG, to the Board of Directors of the Company

------------------------------------------------------------------

The principal business of Advisors V is serving as the sole ultimate general partner of related entities (including the TPG Midwest US V, LLC, a Delaware limited liability company (“TPG Midwest US”) and TPG Midwest International V, LLC, a Delaware limited liability company (“TPG Midwest International” and, together with TPG Midwest US, the “TPG Funds”)) engaged in making investments in securities of public and private companies.

Wow! I had no idea that there were so many levels to this. This is starting to read like a novel. I hadn't really paid that much attention to what went on on these boards for a long time, and I've obviously missed a lot.

This is going to be interesting. I have no idea whether Frontier, Midwest, and Republic will integrate or not. I've recently heard that Republic's pilot union is in total disarray, and yet Republic is getting ready to be part of the Star Alliance. I didn't know that much about the competing interests in all of this. I am now only hoping not to find a horse head in my bed.:confused:

Yes, this RJET is very complicated and there are a lot of implications to what is going on. IMHO 95% of them are not good.

Very much so, ACL. Kinda scarey. And I believe the game is afoot by the Reverend. Good luck all. Enjoy the rest of the weekend. Take care and KEEP SMILING!!

Does ALPA National and DALPA understand this deal ?

I mean... how much profit does Delta make on the connect flying done by Republic? If the answer is not alot...

...why not have Republic be a separate national airline (with no scope limits) feeding the Delta system and responsible for their own fuel costs. The Midwest code-share deal with Delta (only one-way) is the only one like it in the industry. Does it limit the "New Midwest" to serving Delta.

Why not have Republic pay Delta a fee for all passengers that connect into the Delta system and Republic keeps all the money on direct flights.

ALPA National needs to understand this deal because it could be undermining our profession.... it doesn't even make the fastread!!!

I think ALPA national is still either wondering how they allowed a contract to be ratified that had no enforceable scope language, or they don't care.

Let me ask, Assume you hired an attorney to represent you in a home closing. A few years after you had moved into and had been paying on the home, the original owner came and took it from you citing some closing document language that wasn't enforceable. Would you hire that attorney again?

I do not speak for ALPA, but IMO the errors made have not gone unnoticed.
The hope is that BB has bitten to much from the apple, and will not be able to deal with all that he has bought.

ALPA has a way to right this with the merger and integration with F9 and republic. If I were a RJET pilot, I would be working very hard to get away from the teamsters, but that is just me.

Assuming ALPA was brought on property, combined with the usual dragging out of contract talks, BB could have bought and sold F9 in that time period making it all a wash anyway. ALPA would not have been able to do a single thing about it.

All true, but the ALPA pilots fare better if he goes and sells republic tp a ALPA carrier and keeps F9 and MEH.
That or he can sell it all make a ton of cash and walk away. I am sure there are two or three airlines that would love to buy that mess.
Being ALPA would help you in an integration with everyone.

ALPA still has trouble understanding their own golf scores much less any sort of challenge presented by Bedford.

So long as the ALPA officers have a prime rib on their plate and a fine wine in their glass, paid for by your dues, then they will continue on in their own mental fog while our careers continue to crumble away year by year.

alpa has nothing to do with any of whats going on with in the new airline. Frontier is self represented and republic as mentioned is teamsters. the only way alpa could do anything is sue delta for a code share (or united/usair... when the code shares start happening). Bedford has been known for mentioning a domestic airline that flies under star alliance colors with code shares for everyone. We used to think it was all crazy rumors...

20 bucks says southwest and airtran start offering some sort of crazy unlimited flying out of MKE for $599. Airlines operate very similiar to wireless providers