Midwest Airlines, the Milwaukee moneypit, saved again

 

060523a_lg.jpgGood money, bad money. Midwest Airlines, which used to be Midwest Express and is sometimes dubbed the bottomless money pit of Milwaukee, has saved itself from bankruptcy with yet another investment by TPG, the Texas Pacific Group. It’s about $30 million. What’s different this time is that it’s lured another airline, Republic Airways, into putting money into its future, even though the last airline it won over, Northwest Airlines, had to write off all of its $213-million investment in Midwest (for a 47% stake). Republic puts in $15 million in a one-year loan, and agrees to another $10 million if Midwest meets some performance criteria. But Republic also gets a home for the dozen 76-seat Embraers it has been trying to place since it had to take them back from Frontier (which hasn’t avoided bankruptcy) in late June.

 

Good for Republic, but the with the Embraer 170s coming into the fleet, Midwest won’t really need all of its Boeing 717 fleet. So it’s worked out an deal to return 16 of the nifty little 100-seaters to the Boeing leasing unit.This has pleased everyone except Midwest’s pilots, who call this “just another example of Midwest’s underhanded tactics” that will cut the ALPA chapter’s ranks by 100 or so, from the 400 who worked there before the first TPG/Northwest investment in 2007. It’s even good news for former Midwest suitor AirTran, another large 717 operator, which may be the planes’ new home, if they don’t go to Hawaiian Airlines.

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