The suspense is over: AirTran let its bid for Midwest Airlines expire and said the two airlines had ended 
discussions of a possible merger, AirTran chairman and chief executive Joe Leonard announced. The Midwest board then announced it had chosen to sell the airline to giant private equity firm Texas Pacific Group with Northwest Airlines included as a 'passive' investor.
AirTran had pursued the Milwaukee-based carrier for more than a year, raising its bid several times and finally offering a combination of cash and stock that it valued at more than $400 million.
The TPG offer, however, is all-cash, and is valued at about $424 million. So if there’s a White Knight here, is it the big money guys, who nearly bought Qantas, and who had nearly bought the old US Airways, or is Northwest? Leonard blasted private equity in a statement issued very late on a Sunday night as the story unfolded, saying “the Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm and a so-called 'passive' investor, whose involvement will surely raise antitrust concerns, casting doubt for shareholders on whether a transaction can, in fact, close.”
Moving to allay any antitrust concerns, 
Northwest said it would not in any way participate in the management of Midwest but was “providing financing to facilitate the transaction." Northwest did say it would “explore cost-reduction activities such as joint fuel purchasing” with Midwest. Northwest, which had signed a code-share pact with Midwest in May of this year, said that its passive investment had been fully explained to its unions, who are not happy about paycuts imposed during Northwest's recent reorganisation. But George Hamlin of Airline Capital Associates still questioned the move, stating, “They will do anything to keep AirTran out of their territory, but is Northwest becoming an investment vehicle instead of an airline?” Leonard (right) said AirTran did not need a merger to grow, but had thought Midwest a great fit. The low-fares carrier, based in Orlando, Florida, but centered at the Atlanta airport, would instead continue to pursue its own organic growth strategy, Leonard said.
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