A couple of weeks ago, in “The Danger of Topsy”, I wrote the following:

http://messages.finance.yahoo.com/Stocks...

<<“To some extent, this applies to some at Frontier, and as BB says, this concept is dangerous.

If this new airline entity is to succeed - whatever this new airline entity is - then it must be as a united whole. Internal divisions could do as much - maybe more - harm to the entity as any of the many external threats.”>>


We saw a couple of examples of that this week, in posts on this board. I don’t think either are representative of the general feeling out there, but there are certain issues that probably need to be addressed, and mostly they affect the MKE or Midwest side.

There is a view out there, encouraged by the Midwest pilots, that Midwest was a terrific airline, doing just fine - if a victim of circumstances - and that BB is destroying that.

Midwest may have been a terrific airline and certainly circumstances (the price of oil, the downturn, etc.) brought it to its knees, but for the rest I can only say - bollocks.

A couple of weeks ago, Republic published financials for Midwest for 2008 and part 2009. They are depressing reading:

http://phx.corporate-ir.net/phoenix.zhtm...

In the single month of January 2008 - before Republic was involved - Midwest lost $42.6 million. For the full year 2008, they lost over half a billion dollars. I will repeat that - $500 million dollars.

(“But davy,” I hear you cry, “ a lot of that was special charges....”)

That’s true. $400 million of it was special charges. Absent those charges, Midwest still lost over $100 million in 2008. They lost a similar amount of money - over $100 million - in the first half of 2009, but $93 million of that was an impairment write-off.

So given various other special charges, it is possible to say that Midwest became what BB said - at least operationally profitable in the first half of 2009.

Without the actions of BB (and TPG), I don't see that Midwest could have survived and it puzzles me that Republic/BB is seen as the villain here.

But then, as Abraham Lincoln is reported to have said: “If you look for the bad in people and expect to find it - you surely will.”

To the rational, Mr. Hoeksma hardly comes out of it covered in glory, but he is the past, BB is the future, and people tend to throw stones at the interloper, the agent of change.

(“But davy,” I hear you cry, “what does this say about Jeff Potter at Frontier? And SM?")

That’s a good question.

cont/...