Midwest Shrinks Again in Latest Restructuring

Midwest Airlines, Northwest

There’s been a dark cloud of uncertainty hanging over Milwaukee during the last few weeks as Midwest worked on its latest round of restructuring. Sure, they had already announced that the MD-80s would be retired and that employee wages would be slashed, but it never seemed to be final. As of yesterday, we now know the airline’s full plans for survival and it once again involves shrinking. Midwest ShrinkingIt now seems more clear to me that Midwest aspires to be a regional operator for the new Delta.

After retiring the MD-80s, Midwest had planned on operating 25 717s. Now, 16 of those will be returned leaving only 9 in the fleet. How will they replace them? With 12 Embraer 170s from Republic.

So, Midwest will now operate only 21 aircraft, down from 37 before this started. (I’m ignoring the SkyWest operated CRJs for this discussion.) Oh, and the new aircraft will have 23 fewer seats than the new 99-seat configuration on the 717s. Clearly, losing four more planes means that some routes will have to be cut or frequencies will have to be reduced. None of the schedule changes have been announced yet, but it has to be coming.

Most interesting here is the addition of the Republic Embraers. These planes will initially be operated by Republic, but Midwest plans on bringing them under their own certificate in the next couple years. It’s important to note that these aircraft will remain in the 76-seat, 31″ pitch configuration they had when they were flying for Frontier. Remember when Midwest had plush 2 x 2 seating on all its aircraft? That’s now become Midwest Class, and you’ll only find it in the first ten rows of the nine remaining 717s. Everything else is standard coach.

This latest restructuring sees new funding from TPG and Republic (I talk more about that on BNET today), but the codeshare and frequent flier partnership with Northwest isn’t going anywhere. So, let’s look at where Midwest might be in a couple years. They’ll have 12 Embraer 170s flying in standard coach configuration. Is it really a stretch to think those will be flying under the Delta Connection banner (assuming the merger goes through)? As for those remaining 717s . . . I can’t imagine it will be hard to get rid of those. The CRJ contract with SkyWest can disappear as well. If Delta likes what they see, they could send more Embraer flying over to Midwest over time, I suppose.

It’s a slow and painful transition for Midwest, that’s for sure, but I now see a path for where they going. It kind of reminds of what Midway did after they converted into a (now-failed) express carrier for US Airways. It might mean survival for them if Delta feels generous, but the days of a true premium product are fading quickly.

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13 comments on “Midwest Shrinks Again in Latest Restructuring

  1. I think certainly those birds could end up flying as Delta Connection but as Republic planes, not Midwest. I cannot imagine another contract carrier, since they already deal directly with Republic. Plain and simple I think this is an opportune short-term placement of those E170s originally destined for Frontier. If Midwest folds, then the timing might be right to fly under the Delta banner…

  2. Oh man… as a Wisconsin girl (well, re-located to NYC) with a ton of family back there that I visit pretty often this breaks my heart. Nothing better than flying in the 2×2 leather seats for about $200 round-trip.
    Well, at least we’ve still got the cookie…

  3. Well Midwest is now further off the list of options for the SFO-GRR trip for Christmas – was always nice to fly to the mid-west on a Midwest plane.

    So looking way ahead – Midwest turns into a regional carrier for Delta/NW. Then what happens to MKE? Focus city? Why when MSP is so close?

    Hope the do *something* with MKE as it’s a small but what i consider a gem of an airport (right there with PDX).

  4. SeaFlyer – Midwest has said they plan on taking those aircraft and operating them under their own certificate. So, if that does indeed happen (as allowed in the contract) then they would be Midwest’s planes to fly until the end of the lease.

    Tucano – No word on the cookies, but I imagine they’ll stick around. They’ve gotta keep something.

    Jeff K – Milwaukee is like Indy in that Northwest dominates but there isn’t an opportunity for a true hub there. So yeah, I think that the new Delta keeps a decent schedule in Indy and Milwaukee to places where there’s a need for nonstops. Those CRJ markets probably go away quickly, but if Midwest drops down to 12 Embraer 170s, I’m sure they could find enough flying out of Milwaukee and Kansas City to make it worthwhile.

  5. It’s hard to imagine airlines being profitable again in the next decade. The $99 one-way fare is going to seem like a joke in 5 years – and it almost seems like a joke now!

  6. Cranky:
    Not disputing that fact. Just saying there’s no way Delta will contract Midwest to fly those planes as Delta Connection. The more likely scenario is Midwest never converts the planes to their operating certificate (continues the ASA agreement with Republic), and in the eventuality that the carrier goes under, the planes COULD be placed at Delta by Republic.

  7. This amazes me. They’re getting more cash to bring in another plane type so they can be like everyone else? Yeesh.

    What I want to know is what happens to the 717s? Do they go to Airtran or down under?

  8. Nicholas – Well, they’re going back to Boeing initially, and then we’ll just have to see where they’re going to put them. AirTran is the obvious target, but I don’t know that they’re interested in any more growth than what they have planned right now.

  9. Cranky, your last comment about Midway becoming a express carrier for US Air Express…uh…explain that would you please? I worked for the Original ML, when based out of MDW, and we were never a carrier for US Air or USAirlines or whatever that miserable airline was. We did get get “cherry picked” when NW bought our assets (gates, slots, etc) in 1991 when were in chapter 7. All the “cherries” went to NW, and the employees (the biggest expense) went to the unemployment line! Are you referring to the Midway that was based out of RDU a few years later???

  10. Of course he is referring to the Midway that operated out of RDU

    Now, will people stop telling me I am wrong when I say that Midwest should have gone for the AirTran deal???

  11. BigJohn – As DRG says, I was talking about the next version of Midway. They were about to go under and instead morphed into a US Express carrier briefly. They ended up dying out completely. (As an aside, I actually flew them a couple times, but I never had the chance to fly the original.)

    DRG – I agree with you, and I’ve said that in previous posts as well. Then again, Hoeksema is probably much happier because he’s kept his job, but all the front line people got a raw deal.

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