Midwest Airlines hired restructuring specialists Seabury Group to help it navigate the industry’s economic and fuel crises, which includes grounding a third of its mainline fleet and turning its regional airline partner, Skyway, into a ground services organization, in favor of a capacity purchase agreement with SkyWest which resulted in the loss of 380 from subsidiary Skyways. Related Story
The Wall Street Journal reported that Chair Timothy Hoeksma, who called the airline’s situation critical, told employees that the restructuring needs to take place in the next 30 days the airline is also seeking additional capital from TPG Capital and negotiating concession from lessors. TPG is helping for the moment but is awaiting deals with vendors, business partners and employees before investing in the restructuring plan, according to the Journal.
The Milwaukee Journal Sentinel cited union comments saying the airline is seeking employee pay cuts of as much as 65 percent from pilots and up to 56 percent from flight attendants n order to avoid bankruptcy, which was immediately rejected my union leaders. Union officials also cited management intentions to ground additional aircraft beyond its entire fleet of MD-80s and including five Boeing 717s. The cuts could mean halving its pilot and flight attendant rosters, each of which has 400 members.
The move comes after Midwest was recently acquired by TPG Capial, with Northwest as a minority stakeholder as part of an effort to avoid a hostile takeover by AirTran. Related Story  The unions are calling for meetings with TPG, which owns 53 percent of Midwest and Northwest, which owns a 47 percent stake in the company. However, Delta already announced its intention to continue its independent operations after it merges with Northwest.