Looks like Midwest found another suitor....
- Thread starter cactusflyer
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delta777
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KCFlyer
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Hmmm...taking the company private. Sorry, but I haven't seen where very many companies that were taken private was very good for the employees. Especially in a market where folks want the cookie, but don't want to pay any more than it would cost to fly Airtran or Southwest. I wonder how much in concessions that TPG will require from employees to maintain the cookie, but get their CASMS to drop at least 2 cents. I wonder what impact it will have when the Midwest fleet is reconfigured to 2 + 3 seating with a couple of extra rows. Bottom line....for the customers who didn't want to see Midwest become Airtran, they are going to see Midwest become....well...Airtran.
Personally, I think this will actually benefit Airtran in the long run. And reading that NWA was a part of the group - I wonder how long before the new "private owners" will take their profits and fold Midwest into NWA.
citrus jock
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Having been against this all along, I'm happy with the outcome. My motives were personal (seniority, wanting to avoid years of employee animosity while things "mesh"). I agree with your sentiments KC. I wish Midwest nothing but the best, and I think that their best hope is to keep doing what they're doing (while lowering their costs), because from what I hear they do it very well. I just can't help but wonder how satisfied those whose mantra was "anyone but AirTran" are going to be when we find out who "anyone" is and what "anyone" decides to do with Midwest as a condition of their investment.
Kev3188
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"Anyone" looks to be NWA along with TPG...
From the NWA employee website (also posted on the NW board):
"Northwest Joins TPG Bid for Midwest Air Group
Northwest on Sunday confirmed it is a passive investor in the acquisition entity that TPG Capital, L.P. (TPG) has created to pursue an acquisition of all of the outstanding shares of Midwest Air Group, Inc. at $16 per share. The bid submitted by TPG is subject to the satisfaction of certain conditions.
Milwaukee-based Midwest Air Group operates Midwest Airlines and Midwest Connect. The TPG offer was presented to the Midwest Air Group board of directors on August 12, 2007.
NWA, which is providing financing to facilitate the transaction, will not participate in the management or control of Midwest should TPG acquire Midwest. The previously announced codeshare agreement between NWA and Midwest Airlines will remain in place and the two airlines will explore cost reduction activities such as joint fuel purchasing.
Northwest has briefed its union leadership on the transaction. The investment contemplated is consistent with all of NWA’s union obligations."
From the NWA employee website (also posted on the NW board):
"Northwest Joins TPG Bid for Midwest Air Group
Northwest on Sunday confirmed it is a passive investor in the acquisition entity that TPG Capital, L.P. (TPG) has created to pursue an acquisition of all of the outstanding shares of Midwest Air Group, Inc. at $16 per share. The bid submitted by TPG is subject to the satisfaction of certain conditions.
Milwaukee-based Midwest Air Group operates Midwest Airlines and Midwest Connect. The TPG offer was presented to the Midwest Air Group board of directors on August 12, 2007.
NWA, which is providing financing to facilitate the transaction, will not participate in the management or control of Midwest should TPG acquire Midwest. The previously announced codeshare agreement between NWA and Midwest Airlines will remain in place and the two airlines will explore cost reduction activities such as joint fuel purchasing.
Northwest has briefed its union leadership on the transaction. The investment contemplated is consistent with all of NWA’s union obligations."
Reminds me of the mid-80s when a similar "anyone but Lorenzo/Texas Air Group" mantra was rampant at TWA and they ended up in the clutches of...Carl Ichan!!
Be careful what you wish for... :blink:
Dont call me Shirley
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PurduePete
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As a former NW employee, I find this scenario is somewhat similar to NWA's 1989 buyout by Al Checchi and Gary Wilson. The company went into private ownership at the time of the sale, and if you ask me, its fortunes went downhill at that time too.
I wish all of the Midwest employees the best of luck - if you are going to be dealing with NW, you'll need it!
KCFlyer
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And if Airtran moved into MKE - it would put tremendous pressure on Midwest to change - which would eliminate their "niche" of wide seats and fresh cookies. Midwest cannot offer "premium" service while charging the same fares as a low cost carrier. Not when their costs are as high as they are. Midwest has a minihub here in KC - it's great to get two abreast seating and fresh cookies - but to compete, Midwest is actually charging LESS than Airtran on both advance purchase and walkup tickets for many routes. On routes where they DO charge a premium - it's about $5. That cannot support what they do. Airtran moving into MKE on their own would throw a monkey wrench into the works.
While so many "loyal" customers were saying "anybody but airtran", IMHO, MIdwest will soon morph into a two class airline...let's call the front cabin "business class" and have a slight premium over full coach, and lets add seats and rows in the back cabin. We could still offer the cookie. But the bottom line is - in order to survive, Midwest will become Airtran...not in name - but in their look and feel.
citrus jock
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I agree. I posted earlier that I thought the offer after offer after offer deal was a ploy to acquire Midwest on the cheap. When all offers are rebuffed, you move in. If anyone complains, you're able to say, "Hey, we tried to do it the nice way (creating more jobs, etc.), but they turned us down." Judging from an article in the AJC today that quoted our COO as saying we will scale down future growth and only add flights between existing cities, who knows what will happen? A few years ago, I was in a recurrent training class, and the COO came in and said in response to a question about new cities, "We will not be adding any new cities this year." A week later, we announced new service to IND and CLT. It made me wonder if the Vice-president of catering is in charge of our route structure.
AstroLounge
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Thats funny. At USAirways the Circus CLOWNS are running the ENTIRE Operation. (Hopefully Midwest will accept the deal.......it looks like a good merger on paper).
QA4Jet-A
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.... and it just got more interesting.... FL raised the bid about 30 minutes ago. Check it out on the next Thread....
Dont call me Shirley
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http://today.reuters.com/news/articleinves...LE-UPDATE-3.XML
UPDATE 3-Midwest takes TPG's raised bid, AirTran backs off
Fri Aug 17, 2007 10:52 AM ET
(Adds background, share price)
By Lilla Zuill
NEW YORK, Aug 17 (Reuters) - Midwest Air Group Inc. <MEH.A>, which had been fending off hostile suitor AirTran Holdings Inc. <AAI.N>, said on Friday it accepted a raised bid of $450 million from private equity firm TPG Capital and Northwest Airlines Corp. <NWA.N>.
AirTran, which had wanted to combine Midwest's hubs in Milwaukee and Kansas City with its presence on the East Coast, ended its dogged pursuit of Midwest, which began in October.
"We accept the Midwest board's decision," AirTran Chief Executive Joe Leonard said in a statement......
UPDATE 3-Midwest takes TPG's raised bid, AirTran backs off
Fri Aug 17, 2007 10:52 AM ET
(Adds background, share price)
By Lilla Zuill
NEW YORK, Aug 17 (Reuters) - Midwest Air Group Inc. <MEH.A>, which had been fending off hostile suitor AirTran Holdings Inc. <AAI.N>, said on Friday it accepted a raised bid of $450 million from private equity firm TPG Capital and Northwest Airlines Corp. <NWA.N>.
AirTran, which had wanted to combine Midwest's hubs in Milwaukee and Kansas City with its presence on the East Coast, ended its dogged pursuit of Midwest, which began in October.
"We accept the Midwest board's decision," AirTran Chief Executive Joe Leonard said in a statement......
CynicalResAgent
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FL should really piss off NW and go after SY and grow a hub in MSP.
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