Transportation Industry

Company Watch - Midwest Airlines

AirGuide Business, Sept 8, 2008

Sep 7, 2008

Midwest Airlines has received USD$60 million in additional financing, including commitments from TPG Capital and Republic Airways Holdings, as it looks for stability amid high fuel prices. Midwest said on Wednesday it also has reached an agreement in principle with Boeing Capital on renegotiated leases for its Boeing 717s. Milwaukee-based Midwest Air Group was taken private this year by an affiliate of TPG Group after a bitter takeover dispute with AirTran Holdings, hopes to stay off the growing list of smaller airlines to either close or file for bankruptcy protection. The list includes ATA Airlines, which closed in April and Frontier Airlines, which entered Chapter 11 in April. Midwest said in July it would cut its work force by 1,200 employees, or 40 percent. The airline industry has been battered severely by high fuel prices this year and many carriers have responded with sweeping capacity cuts. Midwest flies to the East and West Coasts and to destinations in between from Milwaukee and Kansas City. Sep 6, 2008

Midwest Airlines reached an agreement in principle with Boeing Capital Corp. on renegotiated leases for its fleet of 717s. It will continue to fly nine of the original 25 717s it had on lease while returning 16 to Boeing this fall. "Operating a more fuel-efficient, flexible mix of aircraft makes good economic sense in this new energy environment," Hoeksema said, adding that Midwest will continue negotiating with its pilots and flight attendants "on concessions necessary to align its labor costs to the marketplace." The agreement with Republic is for 10 years. All fuel will be purchased by Midwest. Republic said it also will loan Midwest an additional $10 million if "certain milestones" are achieved, adding that "the loan(s) is collateralized by all of Midwest's unencumbered assets." Sep 5, 2008

Midwest Airlines signed an agreement with Republic Airways yesterday under which the Indianapolis-based regional will operate Midwest Connect flights on 12 76-seat E-170s beginning Oct. 1, part of what Midwest Chairman and CEO Timothy Hoeksema said is "significant progress in its voluntary restructuring plan." He said the carrier also secured $60 million in additional financing, including commitments from TPG Capital and Republic, which agreed to give Midwest a one-year, $15 million loan as part of the air services agreement. He added that Northwest Airlines will continue its codeshare and frequent-flier program arrangements with Midwest. Sep 5, 2008

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