Company Watch - Midwest Air.

Aug 6, 2007

AirTran Holdings announced Wednesday that he's confident that the airline operator will be successful in its effort to acquire rival Midwest Air Group, "I can't say it's inevitable, but we're very optimistic," Joe Leonard, chairman and chief executive officer of Orlando-based AirTran Holdings, stated during the Milwaukee Press Club's Newsmaker Press Conference at the Newsroom Pub in downtown Milwaukee. Aug 2, 2007

Midwest Air Group shares jumped 13% on news that the budget carrier will sit down with AirTran and other, unnamed, parties interested in the airline. Midwest's board of directors has created a committee to explore the company's options but continues to recommend against a merger. Aug 2, 2007

Midwest Air Group cautioned that there is no assurance that the process will result in a transaction with AirTran or any other party. The company did not give a deadline for a recommendation by the committee. Midwest, which posted lower second-quarter earnings last week, has faced increasing pressure from its shareholders. Last week, hedge fund Octavian Global Partners, the largest institutional holder in Midwest, said the airline's board should open talks with AirTran. Aug 1, 2007

Midwest Air Group said it planned to begin talks with would-be acquirer AirTran Holdings and other potential buyers, leading to a 13 percent jump in its shares. For months, Midwest -- a budget airline based in Milwaukee -- steadfastly opposed a hostile offer by rival AirTran, saying it had more value if it remained independent. But its resistance weakened last month, when shareholders elected three board members nominated by AirTran. Aug 1, 2007

Midwest Air Group said that while it had not changed its recommendation that shareholders reject the bid, it planned to start talks with AirTran, which has offered USD$15 a share, or about USD$367 million in cash and stock. The offer to talk is the first response from Midwest since it allowed AirTran to make a presentation to its board on July 16. Midwest said its nine member board had formed a committee to explore strategic and financial alternatives. That committee planned to hold discussions AirTran and other parties that have recently expressed interest in the company. Aug 1, 2007

Midwest Air Group, parent company of Midwest Airlines, said today that, as of August 2, it had entered into confidentiality agreements with four interested parties. The agreements were entered into following the formation of a committee of the airline holding company's board of directors to explore strategic and financial alternatives that would serve to enhance value for the company's shareholders. Aug 3, 2007

Midwest Air Group yesterday took a further step toward a possible acquisition by AirTran Holdings, which has been pursuing it for more than eight months, announcing it had appointed a committee to "commence discussions with AirTran regarding its proposal to acquire all the outstanding shares of Midwest." The company added that the committee also will "hold discussions with other strategic and financial parties that have recently expressed interest in pursuing a transaction with Midwest." The decision came a few days after the Milwaukee-based carrier reported a 44.6% drop in second-quarter earnings . In June, AirTran was successful in getting a slate of three directors elected to the nine-person Midwest board Aug 1, 2007

Midwest Airlines' board of directors today said it has formed a committee to "explore strategic and financial alternatives," including talks with takeover hopeful AirTran Airways and other undisclosed "financial parties that have recently expressed interest in pursuing a transaction with Midwest." The board said it has not changed its recommendation to forego a merger with AirTran in favor of its go-it-alone plan, but the newly established committee said it would make a recommendation to the board after exploring alternatives. Aug 1, 2007

Midwest Air Group reported second-quarter earnings of $4.9 million, a 44.6% drop from the $8.8 million profit posted during the same period a year ago. Operating revenue rose 10% to $194.5 million, which the company attributed to a 15.8% increase in passenger traffic. "While the pricing environment was challenging, the demand for travel remained strong in the second quarter," CEO Timothy Hoeksema said. Operating income plunged 65.9% to $2.6 million from $7.5 million in the year-ago quarter as expenses climbed 13.4% to $192 million. Jul 30, 2007

Midwest will continue to pursue its plan of "aggressive route expansion, frequency increases and equipment upgrades" that he claimed will "enhance the value of the company for shareholders by significantly improving profitability." Jul 30, 2007

Midwest Airlines and Midwest Connect flew 1.26 billion RPMs during the quarter, up 15.8% year-over-year, against a 13.1% increase in ASMs to 1.52 billion. Load factor was up 2 points to 83.3%. Yield dropped 5.3% to 13.75 cents, unit revenue declined 2.5% to 12.73 cents and unit cost inched up 0.5% to 12.56 cents. Nonfuel CASM rose 2.5% to 8.22 cents. Jul 30, 2007

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