is midwest going to cut skywest flying out completely?

 

Republic Airlines to Operate 12 Embraer E170 Jets for Midwest Airlines: Financial News - Yahoo! Finance

Key commercial terms of the agreement include:
1. Under the Airline Service Agreement (“ASA”), Midwest will purchase all capacity at predetermined rates and will directly pay or reimburse Republic for industry standard pass-through costs.

2. The first aircraft will be placed into service on October 1, 2008 and the last aircraft on November 15, 2008.

3. The agreement has a term of ten years. However, at Midwest’s option, and at any time prior to June 1, 2010, Midwest can elect to convert the ASA into a long term aircraft lease. The 12 E170’s would be leased from Republic for the remaining duration of the ASA and operated on the Midwest Airlines operating certificate.

4. All fuel will be purchased directly by Midwest and will not be charged back to Republic.

5. Republic made a one year term loan to Midwest in the amount of $15.0 million, with an additional loan commitment of $10.0 million, based on the achievement of certain milestones.
6. The loan(s) is collateralized by all of Midwest’s unencumbered assets and generally be senior to other lender’s security position.

I could be misinterpreting this, but some pilots, FA, Maint personnel will be furloughed as a result of cnx of 16 B-717. I'm under the inpression the Midwest Airlines is trying to put E-170 on their certificate, but the Pilots would have to negotiote a contract before the can proceed further.

Midwest Airlines Announces Progress On Restructuring Plan - Midwest Airlines

Milwaukee, September 3, 2008 -- Midwest Airlines today announced significant progress in its voluntary restructuring plan and $60 million in additional financing, including commitments from TPG Capital and Republic Airways Holdings, an Indianapolis-based airline holding company.

Timothy E. Hoeksema, Midwest Airlines chairman and chief executive officer, said $40 million of the additional financing has already been funded, with an additional $20 million committed to be funded upon completion of certain milestones in the airline’s voluntary restructuring plan. Midwest’s restructuring has focused on a strategy to serve its core business markets, cost reductions necessary to address high jet fuel prices and a soft economy, and revenue enhancement actions.

"This commitment of additional financing provides us the best opportunity to preserve what our customers and communities have always valued from our airline, while positioning us for a return to sustained profitability and future growth," Hoeksema said. He added that under the agreement, Northwest Airlines will continue its codeshare and frequent flyer programs with Midwest.

As part of the financing agreement, Republic has entered into an airline services agreement with Midwest to operate 12 Embraer 170 jets under the Midwest Connect brand. Republic will operate the 76-seat Embraer 170s until Midwest can transition the fleet under its own FAA operating certificate. The new Embraer 170 service will be introduced into Midwest Connect’s schedule throughout the fall, beginning October 1.

Additionally, Midwest said that it had reached an agreement in principle with Boeing Capital Corporation on renegotiated leases for its fleet of Boeing 717s. Under the terms of the agreement, Midwest will continue to fly nine of the original 25 Boeing 717s it had under lease for its mainline fleet, returning 16 to Boeing this fall.

"Operating a more fuel-efficient, flexible mix of aircraft makes good economic sense in this new energy environment for the airline industry," Hoeksema said. "We have had to make difficult decisions as part this restructuring that have resulted in change for our airline. But our strategy of offering nonstop service to key business markets and giving our customers what they have always valued about the Midwest brand -- what we were built on -- will not change."

Revenue enhancement actions that are part of the restructuring include the introduction of Midwest Class seating on the airline’s Boeing 717 fleet, which was announced last week, as well as a $15 fee for first checked bag and an increase in the second checked bag fee from $20 to $25. Those fees will apply to tickets purchased on or after Thursday, September 4, 2008 for travel October 21 and beyond. Active members of the U.S. military and Midwest Miles Executive members are exempt from the fees. Wheelchairs, walkers, strollers, child car seats and other mobility-assistive devices are also excluded.

The airline said it plans to continue negotiating with the unions representing its pilots and flight attendants on concessions necessary to align its labor costs to the marketplace, in order to meet one of the final goals of its restructuring plan. It also said that the airline services agreement with Republic would result in additional furloughs for Midwest pilots, flight attendants and maintenance staff until Midwest can operate the Embraer 170 fleet on its own FAA operating certificate. The airline said it expected this process, which includes training for its flight crews and maintenance staff, would take eight months to a year.

"We recognize the difficulty this presents to our flight crews and maintenance staff, who will experience additional temporary furloughs," Hoeksema said. "We informed union leadership of our plan and advised them that this was the best option to keep our airline viable and that in the best interests of our employees, customers and communities, we need them to come to the table on cost reductions so we can obtain certification and bring the jobs back to Midwest."

Seabury Group LLC is advising Midwest Airlines on its restructuring plan and advised the airline on securing and structuring these financial commitments, as well as on restructuring the Boeing Capital Corporation agreement.


Midwest Airlines features jet service throughout the United States, including Milwaukee’s most daily nonstop flights and best schedule to major destinations. Catering to business travelers and discerning leisure travelers, the airline earned its reputation as "The best care in the air" by providing passengers with impeccable service and onboard amenities at competitive fares.

 

No, we are still under contract but the CR2 just isn’t as efficient as the CR7/9 or the E170/175’s are. I'm certain Jerry was approached but we just don't have the a/c sitting around like RAH does plus I think Jerry sees the writing on the wall.

 

Well, that's good news for the RAH guys, not so good news for the Midwest guys. Pretty sad when you have loan $25 million to your mainline airline for a CPA!? This industry is so screwed up, nothing surprised me anymore...

I also read that Midwest will be returning 16 717s to Boeing and will utilize the replacement jets to cover the flying.

 

Seriously?

RAH is flying a comparable sized aircraft in the colors of Midwest while Midwest guys are on the street, and it's the Midwest guys who are stealing RAH's flying?

That's a screwed up viewpoint if you're serious.

 

You have it all wrong. RAH operates the 170s till Midwest can get a labor deal with it's pilot group. That can happen between now and June 2010. If that does not happen by then, RAH will operate for 10 years.

 

No I was beign sarcastic to those guys stating that it is a violation of the CBA

we got the same point of view

 

Here is YX ALPA's Response

Midwest Pilots Express Outrage at Airline’s Deal with Republic Airways



MILWAUKEE—Captain Jay Schnedorf, chairman of the Midwest Airlines unit of the Air Line Pilots Association (ALPA), issued this statement today following Midwest Airlines’ announcement that it had secured commitments from Republic Airways Holdings. As part of the deal, Midwest announced that Republic flightcrews would fly 12 EMB 170s as Midwest Connect, beginning October 1, 2008, directly replacing all but nine of the Boeing 717 aircraft flown by Midwest pilots.



“This is catastrophic news for our pilot group and for all Midwest employees. Management’s plan to replace all but nine of our B-717s with EMB 170s and replace Midwest pilots with Republic pilots will have a devastating impact—raising the number of Midwest pilots who are out of work to approximately 300 of the some 400 pilots who were employed before TPG/NWA purchased the airline earlier this year. Furthermore, management restated its continued intent to wring drastic, draconian concessions from our pilots, holding our very jobs hostage as part of its deal with Republic.



“Midwest pilots are outraged that management is using such underhanded tactics and further decimating this airline. We are putting management on notice that they cannot hold a gun to our heads and deal with our pilot group in this manner. We strongly believe that management’s actions are a repudiation of its contract with us, and we are exploring all of our options to protect our pilots and hold management accountable for the deal it made with us in 2000 and the concessions we made during our company’s restructuring in 2003.



“A year ago, CEO Tim Hoeksema stated publicly that the deal with TPG/Northwest would ‘be good for our airline, the employees, and the community.’ Make no mistake: with this latest deal, Mr. Hoeksema, TPG, and Northwest have revealed their complete disregard for this airline and its employees. Today marks a dark day in the history of Milwaukee, Wisconsin, as management has essentially sounded the death knell for Midwest Airlines and the reputation the employees have built for providing the ‘best care in the air.’”



ALPA is the bargaining representative for the 400 pilots at Midwest Airlines. Founded in 1931, ALPA represents 53,000 pilots at 37 airlines in the United States and Canada.



###



ALPA CONTACTS:

First Officer Paul Sweet, (414) 698-7167, [email protected]

Barbara Gottshalk, (703) 689-4100, [email protected]

 

they are not taking OUR flying! They are going to try to do THEIR flying on our aircraft!

 

I feel for the midwest guys, thats terrible what your management is doing!! Are the midwest guys going to fight this????