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In another lap tray to the belly, customers of Milwaukee-based Midwest Air Group (NYSE: MEH), repeatedly named as one of the nation's best airlines for customer service and comfort, learned today that the airline will be purchased by a group led by TPG Capital. The investor group includes Midwest's competitor Northwest Airlines (NYSE: NWA), which is reviled by passengers for its cattle-car seating, lack of timeliness and failure to understand the concept of customer service

The acquisition offers little in the way of synergy to the two airlines. They duplicate many routes, and Midwest flies the Boing 717, while Northwest uses 747s and 757s. What the deal does accomplish is to block the expansion of a potential competitor in Northwest's upper midwest routes. While the deal secures the present management of Midwest, I suspect it's just a matter of time before the malaise reaches Milwaukee.

Midwest has been fighting off suitor Airtran Holdings' (NYSE: AAI) hostile takeover attempt, which reached $15.75 and $389 million before it folded its cards late last week. TPG, which grew out of the Continental Airlines (NYSE: CAL) takeover in 1993, is offering $16 per share, or over $400 million, to take the company private. The Midwest board voted Sunday to go forward with the TPG offer, and an agreement is expected by midweek.

Northwest (NWA) would rather buy competition than improve originally appeared on BloggingStocks on Mon, 13 Aug 2007 13:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>aaiairline competitionairline industryAirlineCompetitionairtran holdingsAirtranHoldingscalcontinentalmehmidwest air groupMidwestAirGroupnorthwest airlinesNorthwestAirlinesnwatakeovertpg capitalTpgCapitalMon, 13 Aug 2007 13:00:00 EST<![CDATA[Will it be clear skies for Virgin America?]]>http://www.bloggingstocks.com/2007/08/06/will-it-be-clear-skies-for-virgin-america/http://www.bloggingstocks.com/2007/08/06/will-it-be-clear-skies-for-virgin-america/http://www.bloggingstocks.com/2007/08/06/will-it-be-clear-skies-for-virgin-america/#commentsFiled under: , , , , ,

On Wednesday, the first Virgin America Airbus A320s will take flight from New York (JFK) to Los Angeles (LAX) and San Francisco (SFO). The offshoot of European giant Virgin Atlantic, VA is owned primarily by Black Canyon Capital and Cyrus Capital Partners. It enters the market promising to deliver better prices and service than its rivals.

Its immediate rivals would appear to be JetBlue (NASDAQ:JBLU) and Southwest Airlines NYSE:LUV), both airlines operating on a model established by Virgin Atlantic focused on price, price, and price. How likely is Virgin America to make an impact on the increasingly crowded and fragile American air industry?

It has already driven down the price of the NYC-SF route to $250, according to the Wall Street Journal, significantly undercutting its rivals. How much of this price reflects lower costs, versus acceptable losses to establish business, is not clear. The airlines does start with new planes and hardware and new (cheap) hires, so it likely is starting with the lowest overhead it can anticipate.

JetBlue and Southwest, on the other hand, are already struggling with the increased expense of maintaining well-used equipment and the growing salary expectations of experienced crews, leaving them less room to trim costs.

Continue reading Will it be clear skies for Virgin America?

Will it be clear skies for Virgin America? originally appeared on BloggingStocks on Mon, 06 Aug 2007 14:30:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>airline competitionAirlineCompetitionairlinesamerican air travelAmericanAirTravelcoast to coast air travelCoastToCoastAirTraveldiscount airlinesDiscountAirlinesjetbluelos angeles air serviceLosAngelesAirServicenew york air serviceNewYorkAirServicesan francisco air serviceSanFranciscoAirServicesouthwest airlinesSouthwestAirlinesvacation travelVacationTravelvirgin americaVirginAmericaMon, 06 Aug 2007 14:30:00 EST<![CDATA[JetBlue finally replaces Neeleman as CEO]]>http://www.bloggingstocks.com/2007/05/10/jetblue-finally-replaces-neeleman-as-ceo/http://www.bloggingstocks.com/2007/05/10/jetblue-finally-replaces-neeleman-as-ceo/http://www.bloggingstocks.com/2007/05/10/jetblue-finally-replaces-neeleman-as-ceo/#commentsFiled under: , , , , ,

In a long overdue move, JetBlue Airways Corp. (NASDAQ: JDBLU) replaced founder David Neeleman as chief executive officer. Shares of the discount airline soared 6 percent.

Neeleman, who will remain as chairman, was replaced by chief operating officer Dave Barger, who will remain president. Barger certainly has his work cut for him.

As I've argued before, JetBlue's brand has been damaged by service snafus that left thousands of passengers stranded on airport runways for hours on planes that didn't take off.

In response to the negative press, Neeleman established the "Customer Bill of Rights" which promises vouchers for future flights for passengers that find themselves in the same situation. I'm not sure if people that have experienced poor service on an airline would want to fly that same airline again even with a discount.

When it comes to customer service, talk is cheap and actions speak louder than words. If Barger can convince the flying public that the "Bill of Rights" really means something, then JetBlue will be able to expand into other markets and be a serious competitor to Southwest Airlines Co. (NYSE: LUV).

But that's a big if.

JetBlue finally replaces Neeleman as CEO originally appeared on BloggingStocks on Thu, 10 May 2007 11:20:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>airline competitionairline serviceAirlineCompetitionairlinesAirlineServicebrandsjbluJFK AirportJfkAirportluvmarketingtravelThu, 10 May 2007 11:20:00 EST