Programs: United 1k, Midwest Miles, VX eleVAte, Hilton Diamond VIP
Posts: 1,219
Quote:
Originally Posted by yxjames
I cannot believe YX- they should have retired the Super 80's a LONG time ago. YX can use their 717's on routes from MKE-MCO, I flew on one and it was around Christmas 06, and it was about 100% load factor. Thankfully I am able to go to sleep because almost every night at 7:30 I hear MD-80 YX arrivals from the west coast roaring down to 7R @ MKE (I Live Near MKE).
At least in the current configuration, the 717s are a terrible aircraft to use on routes like MKE-MCO. Most of the traffic is leisure oriented and those customers are unwilling to pay for the comfort of a business class seat. The economics may change with the conversion to 99 seats this fall, but are there enough "premium" passengers willing to pay a fare premium to go to Disney? I doubt it.
__________________ If you don't know where you are going, you might end up someplace else.
Meanwhile, the airline's unions have so far balked at the proposed pay cuts, which would top out at around 65% for pilots and 56% for flights attendants, according to the WISN TV of Milwaukee. Jay Schnedorf, head of the Midwest pilots union, tells the Journal Sentinel that one wage-cut scenario would drop some pilots' pay from around $120,000 to a figure into the low-$30,000 range. "It's a catastrophic impact on the families," he tells the paper. Dory Klein of Midwest's flight attendants union adds: "We've sacrificed so much. We really don't have much more to give."
IMO, a 65% pay cut is so ridiculous, either it's a bluff by the company, or the airline is already finished. I'm sure the union sees it this way too. The company is asking pilots to go from over $100/hr to under $30/hr. At that money, a pilot might as well find almost any job, doing just about anything. I'd be shocked if the union actually conceded. I don't think it's a viable offer by the company, nor is it an acceptable concession for people who can easily make that money doing something (or anything) else.
What I suspect, is that Midwest is already on the front steps of bankruptcy court, and this is an eleventh hour effort to score a major win with union concessions. If the company gets these concessions, they not only keep the airline flying without court interference, but they also win by having a fast food restaurant-sized payroll, if/when they return to profitability.
The risk is obviously Chapter 11. Which isn't as much of a risk, as it is a certainty.
Programs: United 1k, Midwest Miles, VX eleVAte, Hilton Diamond VIP
Posts: 1,219
Quote:
Originally Posted by 43north87west
IMO, a 65% pay cut is so ridiculous, either it's a bluff by the company, or the airline is already finished. I'm sure the union sees it this way too. The company is asking pilots to go from over $100/hr to under $30/hr.
The quote in the Journal Sentinel stated that under one possible scenario a pilot may take a 65% pay cut. This information was fed to the newspaper by the union, which is arguing its case in the court of public opinion.
Suddenly, everyone is reporting that Midwest employees will be having their pay slashed by 65%. No one knows if any employee will be taking that much of a pay cut. There are no actual facts to support that statement, nor do we know if that's what Midwest has actually proposed behind closed doors.
That's the problem in situations like this. A lot of rumors, half-truths, and spin occurs when wars like this are waged in the media. The truth often gets lost in all of the hoopla.
None of the above is meant to diminish the suffering all Midwest airline employees and their families are about to encounter. Pay and benefit cuts are coming but none of us know how severe they will be. We only have one side of the story presented by the unions and they don't exactly seem inclined to be completely candid. Keep that in mind.
__________________ If you don't know where you are going, you might end up someplace else.
New Business Journal article from 06.27.08 edition, quotes AirTran as stating that they are waiting for revised flight schedules to be announced by Midwest, before announcing any changes to their MKE service.
Quote:
AirTran, which failed in a long bid for a hostile takeover of Midwest Airlines last year, likely won't discuss expanding service to the West Coast from Mitchell until Midwest publishes any changes to its schedule, AirTran spokesman Kevin Healy said.
Regarding possibility of Midwest filing Chapter 11:
Quote:
Filing for Chapter 11 bankruptcy protection is viewed by Midwest management as "a last resort," but could be an option as the airline copes with record-high costs for jet fuel, Midwest spokesman Michael Brophy said.
"It's not where we want to go, but we can't rule it out," Brophy said. "We're hoping to execute a restructuring plan without going through the courts."
Regarding the parking of the MD80s and how the decision may impact the YX charter business:
Quote:
Midwest Airlines, which has its main hub at General Mitchell International Airport in Milwaukee and a secondary hub at Kansas City International Airport, provides charter service for the Milwaukee Brewers, Milwaukee Bucks and Kansas City Royals using the MD-80 aircraft. Two of Midwest's 12 MD-80s are designated for charter service.
Midwest Airlines spokesman Michael Brophy said airline officials are talking with charter customers to determine their willingness to travel on the 717s, which would require refueling stops on longer trips.
Tyler Barnes, spokesman for the Milwaukee Brewers, confirmed that the ballclub is in "early discussions" with Midwest concerning charter service.
Brophy pointed out that few trips would require refueling stops given that a majority of games in Major League Baseball and the NBA are played in a team's division, which tend to be segregated by region, meaning most travel would be to cities within the 717's range.
I thought charter customers covered the fuel cost as part of the contract?
The parking of the MD80s is a done deal. Now the question is whether charter customers, i.e. professional sports teams, feel that the shorter-range 717 will be sufficient to accommodate their needs. The teams, with players who are paid tens of millions in salary, are not going to want to make a fuel stop, when traveling between cities. Other carriers will gladly service the teams' needs, utilizing aircraft that have the range to fly nonstop on long haul flights.
The chocolate chip cookies are not that good, to make it worth the extra inconvenience.
The parking of the MD80s is a done deal. Now the question is whether charter customers, i.e. professional sports teams, feel that the shorter-range 717 will be sufficient to accommodate their needs. The teams, with players who are paid tens of millions in salary, are not going to want to make a fuel stop, when traveling between cities. Other carriers will gladly service the teams' needs, utilizing aircraft that have the range to fly nonstop on long haul flights.
The chocolate chip cookies are not that good, to make it worth the extra inconvenience.
I agree.... NWA or Delta will jump at the chance to fly charters for the Brewers. I think part of the reason to ground even the charter MD80s is to get rid of everything involved in supporting the MD80s.... Like the Mechanics. Very sad state Midwest has put themselves in.
I think part of the reason to ground even the charter MD80s is to get rid of everything involved in supporting the MD80s.... Like the Mechanics. Very sad state Midwest has put themselves in.
The MD80 pilots will also be demoted in status and pay, assuming they will still have jobs.
The charter customers are not going to want to foot the bill for higher fuel costs on the MD80.
The quote in the Journal Sentinel stated that under one possible scenario a pilot may take a 65% pay cut. This information was fed to the newspaper by the union, which is arguing its case in the court of public opinion.
Suddenly, everyone is reporting that Midwest employees will be having their pay slashed by 65%. No one knows if any employee will be taking that much of a pay cut. There are no actual facts to support that statement, nor do we know if that's what Midwest has actually proposed behind closed doors.
That's the problem in situations like this. A lot of rumors, half-truths, and spin occurs when wars like this are waged in the media. The truth often gets lost in all of the hoopla.
None of the above is meant to diminish the suffering all Midwest airline employees and their families are about to encounter. Pay and benefit cuts are coming but none of us know how severe they will be. We only have one side of the story presented by the unions and they don't exactly seem inclined to be completely candid. Keep that in mind.
The problem for me (and anyone who is taking what information they can get) is that we don't know what's being asked. I don't have any ties to Midwest airlines other than a bunch of miles, and that I fly on them frequently. One would think that if the company was asking for a reasonable cut, they would simply explain what it is, that they're asking for. I would certainly hope that if their requested AVERAGE cut was (x) percent, (x) being less than 65%, this would be an easy rumor to squash. The flying public could then have some sort of confidence that the airline will be operational. (Read: able to carry passengers with some degree of reliability and timeliness). I didn't say they would close the doors, but I don't expect the same service levels or schedules going forward, than we've enjoyed until now.
Anything that makes me think they're going to have subsequent difficulties, is one more reason that I haven't bought ten more tickets from now until next year. I don't have to save that last $10--or even $50, or $100 per ticket; I'd rather have everything buttoned up for the rest of the year and pay a few hundred more for flights, rather than gambling that I'm going to have to pay MORE by being hopeful and assuming that everything will be business as usual. At this time, I'm not confident that it won't just become a headache for me, because everything will get turned upside down. I'm happy that people have faith in the airline and everything, but this is not good, and the PR angle isn't being handled well.
I have to think that I'm not the only person in the world, who books a bunch of tickets at one time and doesn't want to mess with whatever service changes or interruptions could result from whatever is going to take place from this point forward.
Programs: United 1k, Midwest Miles, VX eleVAte, Hilton Diamond VIP
Posts: 1,219
Quote:
Originally Posted by 43north87west
The problem for me (and anyone who is taking what information they can get) is that we don't know what's being asked. I don't have any ties to Midwest airlines other than a bunch of miles, and that I fly on them frequently. One would think that if the company was asking for a reasonable cut, they would simply explain what it is, that they're asking for. I would certainly hope that if their requested AVERAGE cut was (x) percent, (x) being less than 65%, this would be an easy rumor to squash. The flying public could then have some sort of confidence that the airline will be operational. (Read: able to carry passengers with some degree of reliability and timeliness). I didn't say they would close the doors, but I don't expect the same service levels or schedules going forward, than we've enjoyed until now.
I have to think that I'm not the only person in the world, who books a bunch of tickets at one time and doesn't want to mess with whatever service changes or interruptions could result from whatever is going to take place from this point forward.
Midwest doesn't have to say how much the average pay cuts will be. Frankly, I don't know what purpose it would serve to disclose that information to the general public anyway. Midwest is not going to win the public relations battle on this one so they'd be wasting their time trying to correct all of the mis-information being circulated by frustrated and upset employees. It might even create more animosity among the employee groups and that is the last thing Midwest needs as they try to restructure outside of bankruptcy court.
I'm not that worried about the level of in-flight service or flight schedule reductions. Midwest stated in the most recent Milwaukee Business Journal that they didn't expect to eliminate any destinations. They will most likely trim frequencies to leisure destinations but I don't think it's anything to be alarmed about yet. Even if Midwest had to file for bankruptcy, they would still maintain their flight schedules, frequent flier program, etc. The general public probably wouldn't notice much, if any, difference.
This reminds me a lot of 2003 when Midwest was literally within hours of filing for bankruptcy and was under severe competitive pressure by nearly every airline serving MKE. There were constant news stories about how Midwest was on the verge of going out of business. None of those dire predictions came true.
There is no doubt that all of this negative publicity will hurt Midwest, especially with advanced bookings. That's unfortunate. However, they'll get through this crisis and will be a stronger airline as a result. I'm actually happy that they're returning to their roots and will once again dedicate themselves to the business traveler. If that means turning away someone who feels ripped-off if they have to pay more than $200 for a plane ticket so be it.
__________________ If you don't know where you are going, you might end up someplace else.
Programs: Midwest Miles, Northwest World Perks, Alaska Air Mileage Plan, VX eleVAte, Airtran A+Reward
Posts: 1,039
Quote:
Originally Posted by BlueHorseShoe2000
Midwest doesn't have to say how much the average pay cuts will be. Frankly, I don't know what purpose it would serve to disclose that information to the general public anyway. Midwest is not going to win the public relations battle on this one so they'd be wasting their time trying to correct all of the mis-information being circulated by frustrated and upset employees. It might even create more animosity among the employee groups and that is the last thing Midwest needs as they try to restructure outside of bankruptcy court.
I'm not that worried about the level of in-flight service or flight schedule reductions. Midwest stated in the most recent Milwaukee Business Journal that they didn't expect to eliminate any destinations. They will most likely trim frequencies to leisure destinations but I don't think it's anything to be alarmed about yet. Even if Midwest had to file for bankruptcy, they would still maintain their flight schedules, frequent flier program, etc. The general public probably wouldn't notice much, if any, difference.
This reminds me a lot of 2003 when Midwest was literally within hours of filing for bankruptcy and was under severe competitive pressure by nearly every airline serving MKE. There were constant news stories about how Midwest was on the verge of going out of business. None of those dire predictions came true.
There is no doubt that all of this negative publicity will hurt Midwest, especially with advanced bookings. That's unfortunate. However, they'll get through this crisis and will be a stronger airline as a result. I'm actually happy that they're returning to their roots and will once again dedicate themselves to the business traveler. If that means turning away someone who feels ripped-off if they have to pay more than $200 for a plane ticket so be it.
Damn, Blue did you get it all out? Blue you are the poster child for the phrase "The glass is half full" I respect that.
I agree with you to a point. My main concern is for the employees of Midwest Air. This is going to be a very hard time for them and their families. They will have difficulties finding new jobs in this environment. I give Midwest air a 50/50 shot of not going out of business. Their fate will ultimately rest in TPG's hands and their willingness to invest more money into Midwest Air. I think that it is highly unlikely that they will do that but who knows. While business travelers are important you need leisure travelers as well. Midwest will need to cater to both markets in order to stay competitive.
Damn, Blue did you get it all out? Blue you are the poster child for the phrase "The glass is half full" I respect that.
I agree with you to a point. My main concern is for the employees of Midwest Air. This is going to be a very hard time for them and their families. They will have difficulties finding new jobs in this environment. I give Midwest air a 50/50 shot of not going out of business. Their fate will ultimately rest in TPG's hands and their willingness to invest more money into Midwest Air. I think that it is highly unlikely that they will do that but who knows. While business travelers are important you need leisure travelers as well. Midwest will need to cater to both markets in order to stay competitive.
TPG needs to put money into Midwest eventually in order to make the airline profitable. Right now they are pushing Midwest to cut costs. I agree that TPG needs to see a plan before they just blindly throw money into Midwest. I question why it took 5 months for them to say this? I'm beginning to think Midwest hasn't been able to plan for anything for quite a long time now. Everything seems to be reactionary and we all know you can't run a business like this. This is why I have called for different management to run the company.
Programs: United 1k, Midwest Miles, VX eleVAte, Hilton Diamond VIP
Posts: 1,219
Quote:
Originally Posted by Tim34
Damn, Blue did you get it all out? Blue you are the poster child for the phrase "The glass is half full" I respect that.
While business travelers are important you need leisure travelers as well. Midwest will need to cater to both markets in order to stay competitive.
LOL, I guess I'm just an optimistic person by nature. Thanks for the compliment
You're absolutely correct that airlines do need to rely on leisure traffic to help fill seats, especially during off-peak times. However, the problem Midwest and other airliners are facing is that routes dominated almost exclusively by leisure travelers are no longer profitable in the current environment. Times are very tough right now and every airline has to make extremely difficult decisions in order to survive.
__________________ If you don't know where you are going, you might end up someplace else.
Programs: United 1k, Midwest Miles, VX eleVAte, Hilton Diamond VIP
Posts: 1,219
Quote:
Originally Posted by flyYX
TPG needs to put money into Midwest eventually in order to make the airline profitable. Right now they are pushing Midwest to cut costs. I agree that TPG needs to see a plan before they just blindly throw money into Midwest. I question why it took 5 months for them to say this? I'm beginning to think Midwest hasn't been able to plan for anything for quite a long time now. Everything seems to be reactionary and we all know you can't run a business like this. This is why I have called for different management to run the company.
TPG has agreed to provide Midwest with interim financial support and will inject additional cash into the airline if all parties agree to the restructuring plan.
I think TPG has been holding Midwest's feet to the fire ever since the deal closed in January. Considering how slow Midwest has responded to problems in the past, they've actually been pretty quick in taking decisive action this year. The problem, of course, is that the price of oil continues to rise. It's very difficult to manage a business in this environment because no one seems able to predict when the bubble will burst. This makes managing the current crisis all the more difficult. I'm certainly glad I'm not CEO of an airline these days.
These are definately unchartered waters for the airlines. Thankfully TPG has prior experience in turning troubled airlines around. It helps that they have deep pockets too. If they really feel Midwest has a viable business plan going forward, they'll kick-in additional cash to ensure their investment doesn't go completely down the drain.
__________________ If you don't know where you are going, you might end up someplace else.
Programs: Delta Gold Medallion,AA,USairways,Midwest Airlines, National Emerald Club
Posts: 1,437
Quote:
Originally Posted by flyYX
TPG needs to put money into Midwest eventually in order to make the airline profitable. Right now they are pushing Midwest to cut costs. I agree that TPG needs to see a plan before they just blindly throw money into Midwest. I question why it took 5 months for them to say this? I'm beginning to think Midwest hasn't been able to plan for anything for quite a long time now. Everything seems to be reactionary and we all know you can't run a business like this. This is why I have called for different management to run the company.
Nice summary FlyYX, and this has been my point all along that Midwest management is a day late and a dollar short.
So if TPG closed on the deal in January, and YX had $150 Million of unrestricted cash at that point, are we to infer that YX has blown through $150 Million in 6 months? Or was there some threshold at which panic set in, say 2/3 of cash?
I respect that.
