Strategies and tactics: September 2008 Archives

Good 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.

Full retreat is the only way to describe it. Volte-face or flip-flop would also do, but what it means is that United has given up on its plan to cut out free meals for  passengers flying in the back of the plane between Dulles and Europe and instead charge the flyers as much as $9 for a buy onboard meal. The proposal - an industry first - outraged many flyers and indeed corporate customers, who deluged such sites as FlyerTalk with their angry postings. Evidently they deluged United as well, and the airline has now changed its mind. We understand that the go-to-bed-without-dinner experiment was the brainchild of Dennis Cary, the United senior veep for marketing who joined from American some four or five years ago; Graham Atkinson, the charming and long-suffering Englishman whose present title at the Chicago-based airline is chief customer officer, opposed.