The race to the bottom is gaining momentum.

Republic completes Midwest Airlines acquisition

By Tom Daykin of the Journal Sentinel
Posted: July 31, 2009


Oak Creek-based Midwest Airlines Inc. now has a new owner: Indianapolis-based Republic Airways Holdings Inc. completed its $31 million purchase of Midwest on Friday, Republic spokesman Carlo Bertolini said.


Midwest, which began regularly scheduled passenger flights in 1984, will continue to operate under that name. But it's now a wholly owned subsidiary of Republic, which is best known for operating commuter flights for Delta Air Lines Inc., United Airlines and other major carriers.
With the sale, Midwest Chairman and Chief Executive Officer Timothy Hoeksema, who helped start the airline, retires. Republic CEO Bryan Bedford is the new boss.


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.
Midwest's union pilots and flight attendants are negotiating with their union counterparts at Republic about merging the seniority lists of those flight crews. Bedford has said most of Midwest 1,618 employees, including those working at the Oak Creek headquarters, can expect to keep their jobs. But some job cuts are expected among administrative and back-office employees.


Still, Bedford says Republic plans to expand Midwest's service, which should bring job growth for the airline.

 

First time on the next this year?

 

"First time on the net this year?" Is this what you were asking? If so, no. BUT this was the first published number of 190s greater than 2, and returns us to the discussion of "Where are they coming from?"

Chill.

 

Mike Linenberg - Banc of America-Merrill Lynch

If I could just throw in a few more with respect to the Midwest operation. You’ve already announced new service with two 190s. Are those new airplanes coming from Embraer? Then in today’s press release you talk about a need for nine. So the remaining seven, where are you sourcing those? Any color on that would be helpful.

Bryan Bedford

The first two aircrafts are 2008 model year aircrafts. They were aircraft that were operated under a lease in another country. Those aircraft were returned to the lessor unexpectedly, and we were able to take advantage of that opportunity. We’ve got four. I think the next three to five aircraft are coming off the production line at Embraer directly, but those aircraft are also coming to us with leases in place. Again, I’m very flexible in what we think are very favorable market conditions or market term.

We’ve probably got another call it six to eight aircraft that we’re evaluating. We don’t need six to eight aircraft, but that’s about the size of the 190 pool that we’re currently evaluating. We’ll try to round out the population with the best terms we can negotiate from the pool that’s available. So we’d anticipate that essentially all of the aircrafts are going to be 2008, 2009 model year aircraft, most of them coming directly from the factory. All coming under let’s call them two, three, to five-year operating leases.

 

Didn't mean to come off as snappy had a LONG day getting EWR. But the 190s have been mentioned since RAH's initial press release about acquiring midwest.

 

Thanks for the info.