Dan Webb

Yesterday, Midwest announced a deal with Republic airlines. Naturally, each company issued a press release. I happened to read Republic’s first. It announced that twelve of its E-170 aircraft would be head over to Midwest as Midwest Connect (I’m guessing these will be some of the aircraft Republic was operating for Frontier but I’m not positive). The aircraft could be leased by Midwest under their own operating certificate if they wished. The press release also stated that Midwest will pay for fuel and “will purchase all capacity at predetermined rates and will directly pay or reimburse Republic for industry standard pass-through costs.” That’s a really good deal, especially when it is considered that some regional airlines fly routes at their own risk. In addition Republic is providing an immediate $15 million loan to Midwest with an additional $10 million possible in the future. Overall, this is a great deal for Republic, I think.

After reading that press release, I was fairly opitmistic about Midwest. I thought that these additional aircraft could be used to grow the airline’s route network after it cut so many cities, primarily due to dumping the MD-80 fleet. (Cranky has a good post on that, by the way.)

But the Midwest press release goes into so much more detail. The airline has renogiated its 717 leases and is returning 16 of them to Boeing, leaving nine behind. The twelve E170s will be taking their place. Eventually Midwest plans to operate those aircraft under their own operating certificate.

In terms of seats, this move isn’t a huge change in capacity. Right now Midwest has 25 717s configured with 88 seats, a total of 2,200. It is reconfiguring the other 717s to have 99 seats, and the E170s have 76 seats, for a total of 2,100. But either way, there is a net loss of four aircraft. This isn’t counting the CRJs, of course. As far as I know, the number of those aircraft will not change.

Also, Midwest is raising its second bag fee from $20 to $25 and introducing a first bag fee of $15. I’m not sure how well that will work. My father had to fly three legs on E-Jets last week and was impressed by the number of gate checks of carry-ons that couldn’t fit in the overhead bins. I wouldn’t be surprised to see the same on Midwest, but we’ll have to see.

It is sad that Midwest has had to cut so much recently. Personally I still think it should have accepted AirTran’s deal.

On a side note this is the second time Republic has offered financing recently. I wonder what else is up the company’s sleeve, if anything.

Edit: Brett Snyder also posted on this topic on his Cranky Flier and BNET blog. He suggests that the E170s could eventually fly as Delta connection once Northwest and Delta merge, which is something I wish I would have thought of before writing my post! Take a look here and here.