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Author Topic: Buh-bye, Midwest Express  (Read 4861 times)

mu_hilltopper

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Buh-bye, Midwest Express
« on: June 14, 2007, 11:41:11 AM »
Well, with ~60% of the shares tendered to Air-Tran, this morning's news is just one of the last nails in the coffin for Midwest Airlines.  Air-Tran was able to elect 3 to the Board.  --(John Bergstrom was tossed out .. you may recall he was one that lead the charge for "GOLD" on MU's BoT.)

.. It's just terrible news for Milwaukee.  Sure, Air-Tran will keep a hub in Milwaukee .. for a while.  But service will go down and who knows if in a decade, a hub will still exist in Milwaukee.   Midwest Airlines was one of the few jewels of Milwaukee, now it'll be sold off.  Terrible news for the region.


Midwest Air Group Inc. (MEH) now has three new directors after shareholders today elected a slate nominated by hostile suitor AirTran Holdings Inc. (AAI), and ousted three incumbent directors. Midwest Air Chairman Timothy Hoeksema said, in anticipating the outcome of the election, the board has agreed to let AirTran make a presentation on its buyout offer for Midwest. Midwest Air shareholders elected John Albertine, Jeffrey Erickson and Charles Kalmbach, who are replacing John Bergstrom, James Boris and Frederick Stratton on the nine-member board. AirTran announced Monday that 59.5% of Midwest Air's shares have been tendered for the takeover offer, which was extended to Aug. 10. Given that level of support, AirTran executives expected to see their three nominees elected to the board.

jutaw22mu

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Re: Buh-bye, Midwest Express
« Reply #1 on: June 14, 2007, 12:08:42 PM »
damnit.  i love midwest.  i hate air-tran.

ChicosBailBonds

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Re: Buh-bye, Midwest Express
« Reply #2 on: June 14, 2007, 12:45:56 PM »
Well, with ~60% of the shares tendered to Air-Tran, this morning's news is just one of the last nails in the coffin for Midwest Airlines.  Air-Tran was able to elect 3 to the Board.  --(John Bergstrom was tossed out .. you may recall he was one that lead the charge for "GOLD" on MU's BoT.)

.. It's just terrible news for Milwaukee.  Sure, Air-Tran will keep a hub in Milwaukee .. for a while.  But service will go down and who knows if in a decade, a hub will still exist in Milwaukee.   Midwest Airlines was one of the few jewels of Milwaukee, now it'll be sold off.  Terrible news for the region.


Midwest Air Group Inc. (MEH) now has three new directors after shareholders today elected a slate nominated by hostile suitor AirTran Holdings Inc. (AAI), and ousted three incumbent directors. Midwest Air Chairman Timothy Hoeksema said, in anticipating the outcome of the election, the board has agreed to let AirTran make a presentation on its buyout offer for Midwest. Midwest Air shareholders elected John Albertine, Jeffrey Erickson and Charles Kalmbach, who are replacing John Bergstrom, James Boris and Frederick Stratton on the nine-member board. AirTran announced Monday that 59.5% of Midwest Air's shares have been tendered for the takeover offer, which was extended to Aug. 10. Given that level of support, AirTran executives expected to see their three nominees elected to the board.

I loved the airline as well, but at the end of the day you have to be profitable.  Having your main hubs in Omaha and Milwaukee means you better hit a homerun with just about everything you do as a carrier.  This is ultimately an economic decision.

By the way, does Northwest Airlines still have a hub in Milwaukee?  They did when I was a student but I don't know if they still do.

mu_hilltopper

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Re: Buh-bye, Midwest Express
« Reply #3 on: June 14, 2007, 01:47:40 PM »
But .. they've been profitable for the last couple years .. a feat difficult to match with other US Airlines. 

.. From a shareholder perspective .. there's probably no doubt that low-cost, cheapo air transport is going to make more money than the premium service Midwest supplied.  Especially in cheapo Wisconsin, where the public is very thrifty. -- The shareholders will make more dough.  But it remains a giant loss for Milwaukee and SE Wisconsin. 

I wonder what happens to the "Midwest Airlines Center" downtown?

 -- No, NWA does not have a hub in Milwaukee.  For a couple years, they put the screws to Midwest by flying direct out of Milwaukee to some of the MidwestAir destinations, but I think they've ceased all/most of those routes.

ChicosBailBonds

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Re: Buh-bye, Midwest Express
« Reply #4 on: June 14, 2007, 02:37:21 PM »
You're right....my bad...I was looking at their annual net income statements which have been negative 3 of the last 4 years.  However their gross operating profit has been positive.

Chili

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Re: Buh-bye, Midwest Express
« Reply #5 on: June 15, 2007, 09:24:55 AM »
The thing about Midwest was the freaking service. I didn't mind paying a little more for a ticket on them (nor did my companies travel policy) as I could get direct flights and room to work. Now we get AirTran - YUCK! I wouldn't have minded getting Frontier or JetBlu as they have DirecTV on their planes so at least there is something to do while being crammed into a little seat. But no, we get XM Radio. Woohooo - I think most people have iPods now anyway.


By the way, Midwest's hubs were / are Milwaukee and Kansas City - not Omaha. Omaha only had like 3 or 4 direct flights from it.


But one thing made me laugh was that John Bergstrom got voted out of this board position. I wish we could have done this to him over the whole gold thing.
But I like to throw handfuls...

ChicosBailBonds

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Re: Buh-bye, Midwest Express
« Reply #6 on: June 15, 2007, 01:30:57 PM »
Actually Midwest Express did have a hub in Omaha...it was Milwaukee and Omaha and then they added KC in 2000.


http://findarticles.com/p/articles/mi_qn4196/is_20000906/ai_n10633974



Chili

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Re: Buh-bye, Midwest Express
« Reply #7 on: June 15, 2007, 01:35:34 PM »
They did before the went with KC. Omaha is a secondary hub now.

Anyway, this is a good post from brewerfan.net about the situation I thought some of you might find interesting.

I'm speaking up here as a Midwest employee...

I don't think it's over yet. Midwest still has a majority on its board that is opposed to a takeover, and Wisconsin law allows them to drag this out a long time even if AirTran gets a majority of the stock. A lot of people think there might be a private investor or consortium out there who can make a better deal for Midwest than AirTran can, and Midwest can buy enough time to make that happen.

That said AirTran succeeding is the most likely outcome.

Most employees are against this - they've promised to keep jobs and they may even add entry-level jobs (think airplane cleaners, baggage handlers, $8/hour types) but almost all white-collar jobs will move to Orlando or disappear. (Mine is one of the many.)

For the community, air service would probably actually increase, at least for a while - AirTran desperately needs a new hub and MKE is it - they claim to have plans for massive expansion. If you ever wanted a nonstop flight from Milwaukee to Montreal, Manchester NH or Wichita, this will be the time to get it. (And the planes will be nearly empty, too.)

I don't think you need to worry about cheap flights to Vegas and Florida going away - every city in America has those and the demand will always be there.

One interesting thing is that Midwest has a strong record against competition, especially in MKE where we've driven away expansion attempts by Northwest (3 times), American, AirTran and others over the years. AirTran, on the other hand, has a horrible record - sometimes pulling out of a city before flying starts because someone else started to compete against them. So I bet, if they succeed, we'll see rapid expansion into MKE - Northwest will ramp up flight again, JetBlue will come in, maybe even Southwest will finally show up here.

In the end, MKE's airline is likely to be someone like JetBlue, at least partly because they're not AirTran (and they're only airline that holds a candle to Midwest in customer-service surveys- and you'd be able to watch Packer games on Sunday flights.)

I'm personally going to miss the suite at Miller Park if this happens. Plus, Midwest flies the Brewers everywhere they go; wonder if the team would stick with AirTran or look elsewhere for their charters.
But I like to throw handfuls...

ChicosBailBonds

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Re: Buh-bye, Midwest Express
« Reply #8 on: June 15, 2007, 02:49:39 PM »
Speaking of which, doesn't MU use ME for their charters as well?

Chili

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Re: Buh-bye, Midwest Express
« Reply #9 on: June 15, 2007, 03:15:12 PM »
yes do...so do the bucks and I believe Packers.
But I like to throw handfuls...

ZiggysFryBoy

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Re: Buh-bye, Midwest Express
« Reply #10 on: June 15, 2007, 03:26:12 PM »
I've been on the bucks ME charter once.  Flew on it back from vegas after our regular plane was grounded due to mechanical problems.  TONS of leg room, club seating, 2 wide (vs. 3&2 setup). 

The funny part was that the bathroom was standard size.  Not sure how the big guys can take a whiz in there.  They must have to long-shot larry it from the aisle.   ;D
Unless Sultan says differently that is, then we’d obviously have to go with that....

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mu_hilltopper

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Re: Buh-bye, Midwest Express
« Reply #11 on: June 15, 2007, 04:29:57 PM »
My boss flew with the team (MU) to Pitt this year .. I asked him if it was a ME plane .. he said it there weren't any markings on the jet to indicate it was a ME plane .. .. maybe ME has a/some jets for charter that aren't marked.. either that, or they aren't flying ME anymore ..

4everwarriors

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Ziggy...
« Reply #12 on: June 15, 2007, 09:24:15 PM »
While the Bucks are some big dudes, rumor has it around the league that their members are tiny and they sure don't have any balls so standard size lavatories in the plane is not a problem.
"Give 'Em Hell, Al"