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RAH signs agreement with Midwest Airlines

Old 09-03-2008, 01:36 PM
  #1  
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Default RAH signs agreement with Midwest Airlines

On September 3, 2008, Republic Airways Holdings Inc. (the "Company") announced that its wholly-owned subsidiary, Republic Airline Inc. ("Republic Airline"), has signed an agreement with Midwest Airlines, Inc. ("Midwest Airlines") to provide twelve 76-seat Embraer E170 jets for Midwest Airlines with initial service beginning October 1, 2008.

Key commercial terms of the agreement include (i) under the Airline Service Agreement (the "Agreement"), Midwest Air Group, Inc. ("Midwest") will purchase all capacity at predetermined rates and will directly pay or reimburse Republic Airline for industry standard pass-through costs; (ii) the first aircraft will be placed into service on October 1, 2008 and the last aircraft on November 15, 2008; (iii) 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 Agreement into a long-term aircraft lease. The twelve E170s would be leased from Republic Airline for the remaining duration of the Agreement and operated on the Midwest Airlines operating certificate; (iv) all fuel will be purchased directly by Midwest and will not be charged back to Republic Airline; (v) the Company will make 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 as determined by the Company; and (iv) the loan(s) will be collateralized by all of Midwest's unencumbered assets and generally be senior to other lender's security position.
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Old 09-03-2008, 01:51 PM
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I hope that this flying isn't occuring to replace some of the Mad dogs at Midwest Mainline. If not kudos to RAH.
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Old 09-03-2008, 01:51 PM
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Yup. Good for Republic now, horrible for Midwest pilots.

Keep reading the fine print...
-Midwest already got rid of all their MD-80s.
-Midwest announced they will be getting rid of 16 of their B-717s.
-Midwest's fleet will consist of all of 9 (NINE) mainline jets.
-Republic will now hold all of Midwest's assets as collateral.
-Midwest has the option, and in all likelyhood will...
---"Crew these airplanes and add them to their operating certificate, pending labor contract renegotiation and FAA approval."
---""We recognize the difficulty this presents to our flight crews and maintenance staff, who will experience additional temporary furloughs,"

So again, good for Republic; they have homes for the old Frontier jets, although they won't get to keep staffing them once Midwest takes over, but at a huge loss for Midwest pilots.
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Old 09-03-2008, 01:57 PM
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Republic Airlines to Operate 12 Embraer E170 Jets for Midwest Airlines: Financial News - Yahoo! Finance

The new jets will beging flying OCtober 1st. This is a good deal for my roommate who was slated to go on furlough from Shuttle on Friday. Maybe this will change the amount of guys getting furloughed. Perhaps not.....
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Old 09-03-2008, 02:09 PM
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The interesting part will be when Midwest tries to staff our aircraft with their own crews. This looks like a major violation of our CBA!
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Old 09-03-2008, 02:12 PM
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How is it a violation of your CBA for the company to dry-lease the airplanes to Midwest Airlines?
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Old 09-03-2008, 02:14 PM
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cause the contract says any airplane that has anything to do with republic will be flown by republic pilots
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Old 09-03-2008, 02:21 PM
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Good for RAH's and their scheduled furloughs but I fear Midwest won’t existing in 1 year. AirTran has started flying many of their routes and will start to fly many more. AirTran has the lowest operating cost, when you subtract fuel cost, in the industry and Midwest just can’t compete.

Current MKE AirTran routes:

MKE to SEA, SFO, LAX, SAN, LAS, PHX, MCO, FLL, TPA, RSW, BWI, ATL, IAD, BO & LGA.
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Old 09-03-2008, 02:21 PM
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Originally Posted by Killer51883 View Post
cause the contract says any airplane that has anything to do with republic will be flown by republic pilots

I would wager that your contract probably says something about republic airlines, not republic holdings or whatever they call it. Holding companies can usually do whatever they want, that's why they're out there.

I could easily be wrong though since I have never seen your contract.
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Old 09-03-2008, 02:23 PM
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WOW so the Midwest guys are taking your flying..that is just plain wrong
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