Midwest divorces SkyWest; more funding from RAH

CRJDriver

CRJDriver

Well-Known Member
Midwest Airlines said late Monday it has obtained $12 mllion in additional debt financing.

Half comes from TPG Capital, the private equity firm that is Midwest's principal owner. The other $6 million comes from Republic Airways, which provided Midwest with funding last year as part of an agreement to operate a dozen regional jets for Midwest.

Based in Milwaukee, Midwest and Republic operate 16 daily flights from KCI to seven cities.

Republic's additional financing also means the Indianapolis-based carrier will provide 12 more regional jets for Midwest's flight schedule. Midwest said it has terminated the agreement with its other regional partner, SkyWest Airlines.

Once the second busiest carrier at KCI, Midwest shrank dramatically last year when soaring fuel prices rocked the airline industry and forced most carriers to cut flights and seats.


http://economy.kansascity.com/?q=node/2375
 
WHOA! Does that mean a furlough for Skywest? I thought they were already overstaffed as it is, and this could be the nail in that coffin.
 
Wasn't Skywest flying 12? And now RAH will replace those 50-seaters with 10 70-seaters and 2 94-seaters?

How much does the 170 burn from MKE to MSN?
 
Just answered my own question...welcome to MKE Chautauqua

Midwest Airlines getting $12 million in financing
By Tom Daykin of the Journal Sentinel
Posted: Jun. 8, 2009 5:22 p.m.

Midwest Airlines Inc. is getting additional financing from Indianapolis-based Republic Airways Holdings Inc., another sign of Republic's increasingly important role in the fate of the financially troubled carrier.

Republic has agreed to loan Midwest an additional $6 million, according to a filing Monday with the Securities and Exchange Commission.

The Republic loan is being match by $6 million in additional financing from TPG Capital, which holds a 53% stake in Midwest. That's according to a source who saw a memo about the Republic and TPG financing.

Also, Republic's contract to fly jets for Midwest Airlines and Midwest Connect is growing, the filing says.

Republic will add 12 Embraer regional jets, with 37 seats to 50 seats apiece, to the contract. All of those jets will begin flying for Midwest by January, the filing says.

Those Republic jets will replace the 12 50-seat CRJ200 regional jets now flown for Midwest by St. George, Utah-based SkyWest Inc.
 
Boy, I've never been so glad that AWAC RJ's didn't end up in Midwest colors. What a blessing in disguise not to be a part of that mess right now.
 
All I got to say is, that Im starting to hate the airline industry more and more.

I got a lot of friends at SkyWest, most of them in MKE and I wish them all the best. I'm hoping for no furloughs, but for some reason I don't see SkyWest paying a bunch of pilots they don't need.
 
Looks like CHQ found a place for their 135's that they were going to park.

I'd imagine this brings back the rest of the CHQ furloughs?
 
CRJDriver said:
All I got to say is, that Im starting to hate the airline industry more and more.

I got a lot of friends at SkyWest, most of them in MKE and I wish them all the best. I'm hoping for no furloughs, but for some reason I don't see SkyWest paying a bunch of pilots they don't need.
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I have about 10 friends in the bottom 100 at SkyWest.
 
Bold move. If/When Midwest goes down they might be taking a good chunk of Republic with them.
 
Trip7 said:
Bold move. If/When Midwest goes down they might be taking a good chunk of Republic with them.
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I'm betting Midwest is gonna sell tickets while RAH flies the airplanes. What's next "Thank you for flying Orbitz air, operated by Pinnacle Airlines, a wholly owned subsidiary of Viacom?"
 
jtrain609 said:
WHOA! Does that mean a furlough for Skywest? I thought they were already overstaffed as it is, and this could be the nail in that coffin.
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I doubt it. They'll just take more lines from ASA out of ATL and have them furlough more. :sarcasm:
 
I agree with Marcus here. When Midex folds its just going to really hurt Republic Holdings in general. Now it will be the CHQ guys as well. I just dont see this happening since its suppose to start in Jan 2010? Does anyone really see Midwest being around then still? I mean after all this is a HOMETOWN airline. I just dont see many people flying them with all these changes that are being so public in the news up in MKE/MCI.
 
This will not be growth. These erjs are set to leave from other codehare partners anyway at the end of the year. Instead of a gradual pull down, it could be a heavier blow if midwest did die. My bet is skywest mgmt wanted out of this anyways. Rah is really gambling though in the amt of money they are dumping to a carrier that was on a sure path to death. I'm also guessing there is more then meets the eye, and that there is something more to the story.
 
Kingairer said:
I'm also guessing there is more then meets the eye, and that there is something more to the story.
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Bingo!

RAH umbrella 2010
Republic (170)
Shuttle (170)
Chautauqua (145)
Midwest (190) in Delta colors

Keep in mind that NWA paid over $200M and got in bed with TPG to keep Airtran from getting a big presence in the upper midwest. NOTHING has changed except that now they have to fight SWA, too. The SWA operation will not get as big as Airtran's planned groth because MDW is just to the south.

With the new construction scheduled for MKE, these airlines have room to grow, and it gives them a hub-like services to the northern IL/Chicago crowd who is sick of the ORD mess and who does want to drive to MDW.
 
How about a codeshare with republic operating under Midwest flying larger E jets or Boeing/Airbus products? Similar to the current US Air/United codeshare.
 
As someone said there is plenty more than meets the eye. I have a funny feeling that Delta aka "TPG" has a hand in this. BB and Co. wouldn't be throwing all this money into an operation that is about to go bankrupt. As much as we like to think that we know all that is aviation, I am pretty sure the people investing millions into these companies are more "in the know" than we are. It may seem like Midwest is on its deathbed but as soon as Delta announces a big code share agreement things change. It also could just be these guys taking huge risks and it may be over in 6 months I just have a hard time believing that.
 
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