AirTran Boosts Offer for Midwest Air

A Midwest plane is parked at Gen. Mitchell International Airport, Thursday, Jan. 11, 2007, in Milwaukee. AirTran Holdings Inc. appealed directly to shareholders Thursday with its sweetened offer of about $345 million in cash and stock for rival Midwest Air Group Inc. after the regional carrier rebuffed an earlier takeover attempt. (AP Photo/Morry Gash) (Morry Gash - AP)

Some passengers and shareholders fear those touches might end if AirTran is successful in its hostile takeover.

But Leonard said a merger would create a more competitive company in the changing airline industry and provide better service to underserved cities such as Milwaukee and Kansas City.

He told investors in a conference call that the combined company would have more modern equipment, coast-to-coast service with multiple hubs and no "gas guzzling" aircraft like those he said Midwest currently operates.

Helane Becker, a transportation analyst with Benchmark Co. LLC of New York, said AirTran and Midwest seem to be a good fit.

"There's a lot of synergies that AirTran can get in this transaction...You don't need two CEOs, two CFOs," she said.

Representatives from the Air Line Pilots Association met this week with AirTran executives, according to Jerome G. Schnedorf, chairman of the Midwest Airlines unit, which includes about 380 pilots. It planned to meet with Midwest Air Group next week.

Schnedorf said the union has taken a neutral stand on the AirTran bid at this point. A closer look at AirTran's detailed economic plan is needed before it can be seriously evaluated, he said.

"You have to really look at things at that level and not have an emotional reaction to what might appear to be a good thing," he said.

Midwest has 3,500 employees, serves 47 cities and operates 341 flights a day. AirTran currently operates 700 flights a day to 50 cities with 8,000 employees. Leonard said the combined company could reach 1,000 departures a day in 74 cities.

In July, Midwest Air Group said it posted a profit of $8.8 million in the second quarter, ending a string of losses that dated to the third quarter of 2003. The company continued its profits in the most recent quarter, posting a profit of $1.6 million.

Leonard has said a combined company would reach $3.5 billion in revenues and have some 15,000 employees by the end of this year.

Other airlines continue to discuss mergers.