AirTran makes case for Midwest merger at transportation conference

By Lisa Kerner

Charlotte, N.C., June 13 - AirTran Holdings, Inc. expects to lower costs every year, chairman and chief executive officer Joe Leonard said during a presentation at the Merrill Lynch Global Transportation Conference in New York on Wednesday.

"It's a process, it's a culture," Leonard said of AirTran's consistent profitability over the last decade.

Leonard spent a good deal of time making a case for his company's acquisition of Midwest Air Group, Inc. "We think there is a compelling case to combine AirTran and Midwest," Leonard said, noting Midwest's reluctance to make a deal. "The response [from Midwest] has been go away and leave us alone."

Midwest shareholders, however, have tendered almost 64% of their shares in favor of a merger, according to Leonard. "It's a mandate, not a straw poll" as some have said of the shareholders' response, Leonard added.

In making his case, Leonard pointed out that Midwest's east-to-west flights complement AirTran's north-to-south flights, benefiting customers and creating instant diversification in route structure. Both airlines have large fleets of 717s and can bring efficiencies by combining. Plus, AirTran's new 737s can replace Midwest's aging MD80s.

"No other operation can bring the synergies we can," Leonard said of AirTran.

On Tuesday, AirTran once again called on Midwest to begin merger talks, citing news that Midwest missed its targeted financial results for the second consecutive quarter as well as for the full year.

AirTran extended its tender offer for Midwest to midnight ET on Aug. 10 from June 8. The offer was originally slated to close on May 16.

As of June 8, shareholders agreed to tender more than 14.6 million shares, of 59.5%, of Midwest to Galena Acquisition Corp., AirTran's wholly owned subsidiary. Midwest's board must approve the acquisition.

On April 2, AirTran increased its buyout offer for Midwest to $9.00 in cash and 0.5842 of a share of AirTran stock - then worth $15.00 per share - from its original October 2006 offer of $11.25 per share.

Midwest is a Milwaukee-based provider of jet service to primarily business travelers.

AirTran is the parent company of AirTran Airways, a low-fare airline based in Orlando, Fla.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.