By Patrick Fitzgerald
WisBusiness.com
MILWAUKEE – Midwest Air Group, the parent company of Midwest Airlines, saw its shareholders elect three new AirTran Holdings-backed members to its board of directors during today’s annual meeting, casting further doubt over the survival of Midwest Airlines.
The results of the election came as little surprise to many observers. But it did exacerbate fears of an AirTran merger, which some believe would leave Milwaukee’s hometown with an airline of substantially lower quality.
“While we are disappointed by today’s results, we recognize that our shareholders have spoken,” said Tim Hoeksema, chairman and chief executive officer of Midwest. “If today’s election says anything at all, it says that our shareholders want us to listen and that is what we intend to do.”
Hoeksema has refused in the past to negotiate with suitor AirTran and said its offer of $15 a share is inadequate. But he has been under increasing pressure from institutional investors to bargain with AirTran.
The election means AirTran now has three seats on the nine-member board and is one step closer to absorbing Midwest. The new members are John Albertine, Jeffrey Erickson and Charles Kalmbach. They will replace John Bergstrom, James Boris and Frederick Stratton.
During the shareholders meeting, audience members expressed solemn gratitude for Midwest’s 23 years in business, mostly thanking Hoeksema and the Midwest employees on hand during the initial portion of shareholder commentary, lauding them for maintaining an exceptional quality of service during a very difficult time in the airline industry.
However, during the tail end of the meeting, speakers from the audience grew increasingly skeptical and heated, continuously delivering barb after barb at Hoeksema, accusing him and Midwest’s power structure of caving into “a high-powered conglomerate.”
“My message to those who would sell us out is shame on you,” said one shareholder, with another one adding “it’s not about caving into the cookie, it’s about preserving Midwestern values.”
One shareholder offered the most acute criticism of the meeting, in which she said “send AirTran back to where they came from,” earning applause from the rest of the audience.
Following the shareholders meeting, Hoeksema held a press conference where he reiterated that Midwest will allow AirTran to make a presentation regarding its business model, assuring that the board of directors only agreed to listen and that no deliberations or negotiations are planned.
When asked if today’s election constituted the beginning of the end for Midwest, Hoeksema remained vague about the future of Midwest, only commenting that its future business initiatives remain unchanged for the time being.
“Our board members feel that our long-term strategic plan is of better value on the table,” said Hoeksema. “We are all about the business and continuing to grow and implement our long term strategic plan, and hope to be at Midwest Airlines for many years to come.”
Hoeksema adjourned the meeting until June 26, when Midwest will make a certified election report public.
