knope2001

The headline has been updated to say 446.

WIRunner

There's a lot of speculation with what if FL bought the YX.
It could've prospered.
It could've floundered and stopped flying.
Or WN could've still bought them and we'd be seeing the wind-down of a lot of markets. (FL had a pretty aggressive, and fairly unsustainable growth plan)

MKE is in the bad position of being fairly close to ORD, but in the upside that if another airline comes in and offers a modest amount of popular destinations they could do quite well. WN, although offering plenty of benefits, is seriously overrated as a carrier.

Maybe the new "PeoplExpress" will make its way to MKE.

Only time will tell.

MikeFromMKE

Hi IllinoisMan, welcome to FlyerTalk.

BlueHorseShoe2000

American Airlines will reinstate mainline service on MKE-DFW effective April 4, 2012.

The schedule will be 4x daily (2x MD80 and 2x ERJ).

newsmanhoss

A small silver lining. Thanks for sharing, Blue.

Let's hope other carriers follow suit on select routes.

piotrkol1

I believe this is right around the same day that the mainline service started last year, only to be dropped after Thanksgiving. We can only hope that its here to stay this time.

flyYX

At the price AirTran was willing to pay for Midwest, I think they would have floundered. I think where it all went wrong was the battle of egos between Hoeksema and Joe Leonard. Neither wanted to give in to the other. What AirTran should have done was withdraw the offer and returned with a new lower offer once it was 100% obvious that Midwest wasn't going to make it on its own. Hindsight is 20/20 though.

BlueHorseShoe2000

I've debated whether to jump back into the discussion. After all, we're talking about events that happened five years ago.

With that said, I think some people have selective memory about what happened (and I'm not saying that you do flyYX).

A few points:
1) Midwest didn't want to sell. The AirTran take-over attempt was hostile.

2) The final AirTran offer was contingent on obtaining financing at or below a certain interest rate. That clause was the primary reason why Midwest's board rejected the offer (despite all of the spin here and elsewhere, the events leading up to the board's decision are detailed at length in SEC filings). Given that Midwest went into loss making mode in the 3rd quarter of 2007 and the collapse of the credit markets, it was hardly guaranteed AirTran would have obtained financing.

3) TPG/Northwest offered more money for each share AND it was all cash. AirTran was a combination of cash and stock.

4) The Midwest stockholders voted overwhelmingly to accept the TPG/NW offer.

5) AirTan's hub plans for MKE were simply unrealistic. Almost 45% of departures were to be on 32 and 50 seat regional jets. Regional jet economics don't work with LCC fare structures. Can you imagine how much red ink would have been flowing during the summer of 2008 when oil was at $140 +.

6) AirTran executives said that had their purchase of Midwest gone through the combined airline would have likely filed Chapter 11.

Hoeksema certainly made mistakes. We also know that Northwest invested mainly to block AirTran and keep LCC service out of the heartland markets. However, if we didn't have the oil crisis of 2008 and subsequent recession, Midwest might have made it. Would they have survived the last few years? We'll never know.

I understand that emotions are running high especially among impacted employees and frequent travelers. It's natural to try and cast blame on someone and Hoeksema is an easy target. Yet there's is plenty of blame to be thrown at AirTran (creating an unsustainable fare war) and Republic (for any number of avoidable screw-ups they made the last few years but that's a topic for a different thread).

The point is none of us know how things would have turned had AirTran been successful. Perhaps we'd all be here right now talking about the closure of AirTran's MKE hub and how stupid Midwest was for selling out to Joe Leonard and Company.

(My apologies MikefromMKE for getting somewhat off topic)

flyYX

I agree with all your points, but I still believe that AirTran played their cards wrong when going after Midwest. They pushed Midwest into a sale... They actually thought nobody would bid on Midwest. If AirTran would have waited for Midwest Stock to tank again and based on history, I believe it would have fallen below 4 dollars a share, then AirTran could have swooped in again with a much lower offer. This is all water under the bridge now and it doesn't matter anymore.

mke9499

Great post, Blue.

I was at the MEH shareholders' meeting, where AirTran made their public presentation. Among the attendees were Midwest and AirTran management, hedge fund representatives, local YX shareholders, YX employees, etc; the AirTran team did not receive a warm welcome from most of those assembled. Midwest showed a video montage prior to the meeting, which included years-worth of their commercials; the commercials brought back lots of memories, which certainly contributed to a heightening of emotions. It was a well-orchestrated move on the part of YX management.

Following the FL presentation, a member of the AirTran team returned to his seat in the audience. As an elderly man in the crowd made direct eye contact with him, someone whom he obviously considered to be his adversary, the elderly gent made a very vigorous thumbs-down gesture, right in the face of the AirTran presenter (it probably could have been worse, if the gesture were just slightly different); those in view laughed uncontrollably. It was a great tension-breaker.

I recall one of the hedge fund reps standing up to offer his comments supporting the AirTran offer. To appease the many local, small stakeholders in the audience, he assured them that AirTran would have to keep the Midwest cookies, as a part of the deal. After five years, it's funny that now, the cookies will be about all that's left as a reminder of Midwest.

Dick Ginkowski

Quick! Besides Denver, where does Frontier fly?

OK, no need to write a literal response but I just wanted to point out that the last year or so of erratic Frontier conduct isn't helping it as a competitive airline. They needed to expand routes and code sharing and basically fizzled. Not opening the DEN BCC was a sign.

IllinoisMan

Milwaukee will have 450 fewer jobs, and that is what the title says. How is that deceiving?

piotrkol1

This most recent article isn't quite as forgiving:

http://www.jsonline.com/business/cut...139329858.html

The service cuts and layoffs show Frontier has lost the Milwaukee battle with Southwest and AirTran that started in 2009, Sorensen said. Frontier's owner, Republic Airways Holdings Inc., is seeking a buyer for the airline, but Sorensen believes those efforts are futile.

"This airline will fail," he said. "There's nothing left to buy."

I do find it interesting though that he thinks WN is likely to pick up MKE-EWR/PHL.

WIRunner

It did after it was changed, it first said 500

knope2001

Good lord...

--This airline will fail? It has a far better chance to be profitable as the streamlined DEN-focused ULCC they are becoming than the disjointed multi-personality plan they were failing to execute. The phrase "they need to decide what they want to be when they grow up" has rattled around my head regularaly since they day they canceled plans for the Denver Best Care Club. Well, they've finally done that. Arguably, Frontier has better prospects to succeed now than it has since coming out of bankruptcy. That's not, IMHO because the legacy YX system was worthless or dead, but because they were not able to figure out how to make it work. Although slashing MKE and MCI is not exactly pleasant to witness (and that's an understatement), from the perspective of Frontier's health it puts them in a far better position. It's not only true in the midwest, but in Denver as well. Frontier's moving to ULCC model means more seasonal markets, no more Q400, more less-than-daily markets, and fewer markets and frequencies operated because they are important to serve the Denver business market. By virtue of the hub they operate in Denver, Frontier will still be rather useful for Denver business travelers, but cuts and changes made there suggest it's not "the same old Frontier" there either.

--There's nothing left to buy? What, exactly, did Frontier shed which was especially valuable to buy? Pretty much nobody buys and airline to get their aircraft, so take that off the table. Frontier's assets at LGA and DCA are of some limited value, and they still are. One could argue that they squandered the customer base they had in the former YX system, but how much of Frontier's overall value was the FF based in Milwaukee and Kansas City? With few exceptions (like AirTran's value to Southwest being access to Atlanta) the key value an airline has is its ability to make money. I'd say there's more to buy than there recently has been.

--Southwest will start MKE-EWR and MKE-PHL? Really? Even if the MKE east-west operation survives intact...which is not a certain prospect by any means...EWR has very limited access for Southwest and it is highly unlikley they'd dedicate any resources there to a new market of EWR-MKE. And Philadelphia is a Southwest station with unprecidented market failures. The lack of successfull penetration against USAirways there makes PHL-MKE a non-starter.

Sorensen's vision field has always been short, but these comments really expose his limits. A small silver lining in the Frontier carnage here is that perhaps local media will finaly pull this guy's card out of their virtual rolodex.