Northwest Airlines Corp.’s planned investment in the corporate parent of Midwest Airlines came about after Midwest Chairman and CEO Timothy Hoeksema contacted his counterpart at Northwest – about one week after Midwest shareholders elected three board members nominated by rival suitor AirTran Holdings Inc.
Also, Northwest’s planned ownership stake in Oak Creek-based Midwest Air Group Inc. would be around 47%, based on its level of equity investment in the transaction.
Those facts were disclosed today in a preliminary proxy statement Midwest Air filed with the Securities and Exchange Commission. The document includes previously withheld details on how Midwest Air reached its sale agreement in August with TPG Capital, a Fort Worth, Texas-based private equity firm, and Northwest.
According to the statement, Hoeksema on June 22 called Doug Steenland, Northwest chairman and chief executive officer, and “discussed Northwest’s interest in exploring a possible transaction with us.”
The conversation was “following up on a call (Hoeksema) had placed in early June,” the statement said, without specifying a date.
I’ve noticed that Midwest is no longer competing for the lowest (or lower) fares to many markets from Milwaukee and Madison. Northwest is often lower, largely to compete with AirTran. It will be interesting to see how this plays out…. I assume this was one, perhaps of several reasons why Northwest would like to keep Midwest around – higher fares within their near-monopoly upper Midwest markets. Southwest may well address the upper midwest market – a boon for local flyers.