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It's no sure thing that the shareholders or regulators will approve this deal. I hope they do, but the shareholders are interested in short-term $$$, rather than the long-term best interests of Midwest (or Airtran) or for that matter Southeastern WI.
In particular, the institutional investors such as Pequot Cap Mgmt want to see the stock go up for a little while before they sell and wash their hands of the whole situation. They could care less about whether Wisconsin continues to have a top quality airline at a slightly higher-than-average price, which many of us in WI consider to be a worthwhile deal.
Airtran's whole idea of expanding Gen Mitchell's air traffic by 50% seems ludicrous to me. Where are they suddenly going to come up with 50% more daily fliers to fill all these planes? They say Chicago. But why would people drive 90 minutes north from Chicagoland to fly a discount airline when they have discount airlines---including Airtran---flying out of Chicago already? It costs money to drive up here & park a car, or to use public transportation, only to fly a cheap airline that is no different than what flies out of O'Hare or Midway.
If anything, people might go out of their way to come up here and fly nonstop on a top quality airline like Midwest, if it gave them a 1st or even business class experience at a price that is close to coach. According to the message thread at JSO, people do that now already. In addition, numerous people in WI---including myself---fly Midwest exclusively because the comfort and service is worth a little higher price.
So I hope they continue to run Midwest as a uniquely high-quality airline for a small premium in fare. There's certainly a chance they'll go away from the model under TPG, but the chance was 100% that they would go away from it under Airtran. Airtran basically said as much.
With regard to regulatory approval, nothing is a sure thing, but I don't see this being a problem. If Northwest is a minority investor and does not have managerial control, there's really no problem. They would be stupid to meddle too much in Midwest's affairs; while they're stuck with an unprofitable business model in their own right, they can simply sit back and allow Midwest to succeed, and they get ROI from their ownership interest in that operation. Some profit on a side investment is better than no profit at all by killing that investment while continuing to lose money on its own operations.
In particular, the institutional investors such as Pequot Cap Mgmt want to see the stock go up for a little while before they sell and wash their hands of the whole situation. They could care less about whether Wisconsin continues to have a top quality airline at a slightly higher-than-average price, which many of us in WI consider to be a worthwhile deal.
Airtran's whole idea of expanding Gen Mitchell's air traffic by 50% seems ludicrous to me. Where are they suddenly going to come up with 50% more daily fliers to fill all these planes? They say Chicago. But why would people drive 90 minutes north from Chicagoland to fly a discount airline when they have discount airlines---including Airtran---flying out of Chicago already? It costs money to drive up here & park a car, or to use public transportation, only to fly a cheap airline that is no different than what flies out of O'Hare or Midway.
If anything, people might go out of their way to come up here and fly nonstop on a top quality airline like Midwest, if it gave them a 1st or even business class experience at a price that is close to coach. According to the message thread at JSO, people do that now already. In addition, numerous people in WI---including myself---fly Midwest exclusively because the comfort and service is worth a little higher price.
So I hope they continue to run Midwest as a uniquely high-quality airline for a small premium in fare. There's certainly a chance they'll go away from the model under TPG, but the chance was 100% that they would go away from it under Airtran. Airtran basically said as much.
With regard to regulatory approval, nothing is a sure thing, but I don't see this being a problem. If Northwest is a minority investor and does not have managerial control, there's really no problem. They would be stupid to meddle too much in Midwest's affairs; while they're stuck with an unprofitable business model in their own right, they can simply sit back and allow Midwest to succeed, and they get ROI from their ownership interest in that operation. Some profit on a side investment is better than no profit at all by killing that investment while continuing to lose money on its own operations.
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