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Quote:
Originally Posted by Tim34
I completely agree Donald. While times are bad in situations like this I tend to be more concerned with the employees. Job cuts like this can force families into bankruptcy and with an economy like we are currently in, that could have drastic consequences.
Tim34 I completely agree that it is a very sad situation for the Midwest employees. Clearly there were risks going forward with Midwest management's plan (as evidenced by the status quo), clearly there were risks in the Air Tran plan.
Hindsight is 20/20 but I was always struck (pre TPG/NW) by the Midwest unions sitting on the sidelines during the acqusition debate. Wisconsin law gives some weight to "stakeholders", i.e. customers and employees in acquisitions. I wonder if the employees have any regrets?
Hmmmm, Northwest, let me think about Northwest, ah, here it is, Northwest does not give a fig about Midwest, and they don't give a fig about its $235 million investment.
Trouble is, if Midwest fails then MKE is wide open again for takeover by an LCC. The incentive for NWA is to keep the status quo as much as possible in the regaion.
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Quote:
Originally Posted by knope2001
Trouble is, if Midwest fails then MKE is wide open again for takeover by an LCC. The incentive for NWA is to keep the status quo as much as possible in the regaion.
Yeah but what is NWA in a position to do? How many millions of dollars is Midwest worth? At some point it is going to become not worth it for NWA
All of this press has got to be hurting Midwest's future bookings, especially from leisure travelers, who typically book months and months in advance.
With all of the uncertainty out there right now, and the reduced flight schedules of all of the carriers, the leisure traveler is not going to risk having a seat, especially at peak travel times.
Midwest is going to have to put a better face out there, even under these conditions. Brophy does not know how to handle this. IMHO he does not try to put out some reassurance, even if, in this environment, it is extremely difficult. That is his job. When you watch him being interviewed, the thought crosses your mind that he's probably wondering why he left Miller.
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Quote:
Originally Posted by knope2001
Trouble is, if Midwest fails then MKE is wide open again for takeover by an LCC. The incentive for NWA is to keep the status quo as much as possible in the regaion.
Yes, what happened was high oil prices. NW is happy to have Midwest in survival mode, keeping out the LCC competition. Not that Midwest was ever any serious competitive threat, still a benefit was to have a completley docile Midwest under control. No more pesky EAS flying for Midwest, no more unproductive intrusions to Minesotta, one big happy family.
Air Tran correctly pointed out that prior to the acquisition Midwest was in survival mode, and noted that pursuing a stand-alone survival strategy carried high risks. Well the stand-alone strategy has come home to bite Midwest.
All the carrriers with the exception of Southwest are in survival mode. The problem is that Midwest was just managing to survive before high oil. Now it is burning the house in Winter to survive.
NW is in survival mode too. It has no time or resources for Midwest. The risks for NW pursuing a standalone strategy are too great so it is focused on its merger with Delta. The $235M has managed to forestall LCC encroachment. I'm sure that NW management considers it money well spent.
Hindsight is 20/20. It is a shame that Midwest management waits until what appears the 11th hour to make changes. Why did they wait until it is too late? Was there no set of numbers to make the fleet work? Was there no set of concessions to make the MD-80s viable? Cuts would have been no doubt draconian, why was labor not involved to have a choice?
I don't think they have been waiting. The changes in the past 12 months have all been an ongoing effort to stave off the rising cost of fuel. Changes were made last year which would keep the company in the black even at $90 oil. The changes earlier this spring were to keep the company in the black at even $115 oil...and those kept the M80 flying. Now this measures are to make them profitable with $135 oil.
Not exaclty a good pattern, is it? And it begs the question of what happens if oil hits $150. But while details can certainly be debated, I really don't see an alternative to this general course of action. One could argue that they should now be making the cuts needed in anticipation of $150 oil. But how much worse would those be? Can you imagine if last fall they made these cuts proactively, saying "we're making these cuts now so we can be profitable even if oil hits $135"?
As for looking for concessions to make the M80 viable, they would probably have to be even more severe than these proposed concessions.
This really is an awful situation, and some very good employees are going to suffer as a result...either by being laid off or seeing severe pay cuts. Unfortunately I don't think there are many alternatives.
Just heard from a third party source that at least one MCO-MKE flight cancelled tomorrow. Scuttle is that YX is making big announcement...filing for Chapter 11?
I'm guessing that the union discussions have not gone well!
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Quote:
Originally Posted by mke9499
Just heard from a third party source that at least one MCO-MKE flight cancelled tomorrow. Scuttle is that YX is making big announcement...filing for Chapter 11?
I'm guessing that the union discussions have not gone well!
Hmmm...I thought negotiations weren't scheduled to start until next week.
Personally, I think Midwest will do everything in its power to avoid a Chapter 11 policy. However, if some of the key stakeholders don't want to play ball Midwest may have no other choice.
These are definately unchartered waters in the airline industry. The news seems to be getting worse with each passing day.
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Quote:
Originally Posted by knope2001
I don't think they have been waiting. The changes in the past 12 months have all been an ongoing effort to stave off the rising cost of fuel. Changes were made last year which would keep the company in the black even at $90 oil.
I'd say Midwest management is about 2-3 months behind the curve. One of the jobs of senior management is to anticipate risks and manage accordingly. Even if it is a fast-paced environment management needs to aggresively manage and earn those big bucks.
Quote:
Originally Posted by knope2001
Not exaclty a good pattern, is it? And it begs the question of what happens if oil hits $150.
I fully expect this to happen BTW. The trend is not good.
Quote:
Originally Posted by knope2001
As for looking for concessions to make the M80 viable, they would probably have to be even more severe than these proposed concessions.
I agree that it was not good, but management did not even try. No creative scheduleing, nada.
Quote:
Originally Posted by knope2001
This really is an awful situation, and some very good employees are going to suffer as a result...either by being laid off or seeing severe pay cuts. Unfortunately I don't think there are many alternatives.
I agree, Seabury will tell us the alternatives and the way forward.
Just heard from a third party source that at least one MCO-MKE flight cancelled tomorrow. Scuttle is that YX is making big announcement...filing for Chapter 11?
I'm guessing that the union discussions have not gone well!
This doesn't surprise me one bit. Anything is possible after all this bad news. Midwest should just shut down during Chapter 11 and start new next spring. All those gates at MKE will be taken away during Chapter 11 bankruptcy. I can see an LCC coming in, but not right away to fill the vacuum. Can you tell I'm in a bad mood?
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Quote:
Originally Posted by knope2001
Fleet and Routes
Q: Are we looking at other aircraft types for long-haul flights?
A: We may look at other fleet options for direct flights from Milwaukee or continue to serve the west coast markets via Kansas City with Boeing 717s. We're in the process of nailing down the schedule and these decisions.
Q: Will we become a low-cost carrier or a regional airline?
A: ....Midwest Airlines and Midwest Connect will continue to operate in partnership to offer quality service to business destinations.
I've finally had a chance to go back to this memo and pull out the two pieces that I found most interesting.
First, I'd really like to know what they mean by looking at other fleet options and how seriously this is being considered. It doesn't seem to make sense given how terrible the yields and traffic mix are on MKE-West Coast destinations. Also, I'm curious at the terminology used in "direct" flights vs. non-stop. There is a difference amd Midwest is certainly aware of that.
Second, there are references here and in media accounts that continue to state that Midwest will serve "business destinations" or that the airline remains committed to its core business routes. This could be a big hint that Midwest may be sharply reducing or eliminating service completely to destinations such as LAS, MCO, RSW, and FLL.
For my own selfish reasons, I hope that MCI-SAN survives the chopping block.
__________________ If you don't know where you are going, you might end up someplace else.
All of this press has got to be hurting Midwest's future bookings, especially from leisure travelers, who typically book months and months in advance.
Midwest is going to have to put a better face out there, even under these conditions. Brophy does not know how to handle this. IMHO he does not try to put out some reassurance, even if, in this environment,
What makes the immediate situation so tough is that the company is still in the process of trying to bring all the pieces together so they can go public with details, but they don't appear to be there yet. So the news vacuum is filled by the information from the pilots union...essentially just information from that pieces of the puzzle (the pilots' wage concession negotitaions) and then just the side of the pilots. During negotiations like this, it's probably counter productive to go back to the media trying to correct misleading statements or incorrect assertions presented as fact. They need to come to an agreement with the unions, and firing back in public will only antagonize the situation.
That doesn't make this any less damaging to Midwest, however. What they need to do in my opinion is do a PR push when the dust settles...no matter if they are in chapter 11 or not...to make sure people know they are still in business and where they still fly. People get a lot of their information reading headlines and half-paying attenion to electronic news items. As soon as they can, they need to get more complete information out there.
I fully expect this to happen BTW. The trend is not good.
Yeah, that's the proverbial $64,000 question.
It's hard to know details (even with public companies) when the action is changing as fast as it is right now. But judging by the severity of actions we're seeing planned for fall at several airlines...with more to come...things are indeed looking very bad. And that's fall -- not winter. I guess it's somewhat arbitrary to pick a particular price point, but $150 oil seems likely to throw most of the industry into chapter 11.
There are those who said back at $90 oil that this was a bubble destined to eventually pop, and was not supported by fundementals. But so far it has only taken an occasional brief pause on the sready march upward, and nothing says it has peaked. Even if this is a bubble, its vicitms might not survive long enough to see it pop.
All of this press has got to be hurting Midwest's future bookings, especially from leisure travelers, who typically book months and months in advance.
With all of the uncertainty out there right now, and the reduced flight schedules of all of the carriers, the leisure traveler is not going to risk having a seat, especially at peak travel times.
Midwest is going to have to put a better face out there, even under these conditions. Brophy does not know how to handle this. IMHO he does not try to put out some reassurance, even if, in this environment, it is extremely difficult. That is his job. When you watch him being interviewed, the thought crosses your mind that he's probably wondering why he left Miller.
Absolutely. All I'm seeing is negative indications that my monthly PHX-MKE (between homes) is in jeopardy with the MD80 service. YX has operated 717s on this route before, so hopefully this won't be the end of the PHX route.
Because I'm not on any particular schedule, I can easily book every month from now until next January, if the price is adequate. I'm sure others like me exist, people who are willing and able to book a long time in advance, even for 10 flights if the price is right. What's keeping me from buying on YX is the instability and the threat of MD80 service to my city. Furthermore, I'm trying to use up the remainder of my once-massive stash of miles from my DCA-MKE commute, which I did for a year or so. I've still got a few award tickets to use. Hopefully I'll get the chance to use them, but I'm not holding my breath.
I also agree that there needs to be a PR campaign of some sort, and soon. I used to receive all sorts of PR type mail or bill inserts from YX all the time, nothing at all recently. It's as if they stopped trying, or maybe they don't have the ability to advertise services they may have to drop at the last minute.
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Quote:
Originally Posted by flyYX
This doesn't surprise me one bit. Anything is possible after all this bad news. Midwest should just shut down during Chapter 11 and start new next spring. All those gates at MKE will be taken away during Chapter 11 bankruptcy. I can see an LCC coming in, but not right away to fill the vacuum. Can you tell I'm in a bad mood?
For many, many, years Pier D @ BWI sat largely vacant. Pier D was the one time hub concourse for good ole Usairways. Fortunately we had Southwest by then so from a customer standpoint USair was barely missed when it pulled out.
It was really bizarre to see all those empty gates. Guess what? USair held on to them (I guess to block competitors) State of Maryland had to buy USair out at a nice sum to get rid of them.
Now the gates are full and all is well. Milwaukee airport and Milwaukee will survive, regardless of the outcome.
. While times are bad in situations like this I tend to be more concerned with the employees. Job cuts like this can force families into bankruptcy and with an economy like we are currently in, that could have drastic consequences.
