I got a little geeky yesterday with all the talk of the Midwest takeover, but I didn’t actually bother talking about the impact on customers. Sorry about that. Yesterday afternoon, it got even more interesting as AirTran came back with a bid that’s a quarter higher than the TPG one. So, we have two competing bids. What’s best for you?
The focal point here is clearly Milwaukee. That’s the home of Midwest and their largest base of operations. It is also what appeals to AirTran. If you live in Milwaukee, you’ve been fighting tooth-and-nail to keep Midwest independent so you can have your hometown airline. Now that the airline will likely be bought by someone, you might want to change your stance.
On one side, we have the TPG/Northwest bid. This is best for Northwest since it basically helps eliminate a competitor. Though they say that Northwest won’t have any management control, you can bet that’s a crock. That’s likes saying Richard Branson has no control over Virgin America.
So what’s best for Northwest here? A nice small airline that’s friendly to them and is just big enough to keep competitors out will do the trick. You probably won’t see much growth, and it’s more likely you’ll see it shrink over time. Frills will start to disappear as TPG tries to get its money out of the investment. The airline will not be the same. If you live in Milwaukee, the last thing you want is more dominance from Northwest. You want more choice. This is not the best outcome for customers.
If there is any winner in this deal other than Northwest, it’s CEO Tim Hoeksema. He clearly likes this deal because he gets to keep his job, even if it is at the expense of his employees. If the airline does try to get “more efficient” and doesn’t grow, that means layoffs are coming. Apparently that’s ok with Hoeksema as long as he keeps his job.
On the other side, we have the AirTran bid. In this offer, you’re just about guaranteed to get more flights as AirTran continues to try to establish a beachhead in the Midwest. After their bid to buy ATA and establish a Chicago hub failed, they’ve decided the next best thing is to move up the lakefront and go to Milwaukee. So, while the Midwest level of service will undoubtedly go downhill, there will at least be more flights to more places for less money. That seems like a better outcome to me.
And for current Midwest employees, that also means that their jobs would probably be more secure since AirTran will need people to run the growing operation. Well, almost all jobs would be more secure. CEO Hoeksema would lose his, and since he’s already shown he’s willing to screw his employees to save his own job, this will be a tough fight once again.
Of course, if Northwest/TPG succeeds, there’s nothing saying that AirTran won’t try to make a run at Milwaukee on its own anyway. I’d have to think that would not come out well for Midwest in the end. No matter what, it’s unlikely that Midwest will continue in its current form at this point.
