Inside Track: AirTran Extends Shareholder Deadline In Midwest Bid
Continuing its hostile pursuit of Midwest Airlines, AirTran Airways last week extended the deadline to March 8 from Feb. 8 in its appeal to gain Midwest shareholder support. AirTran last month raised its offer to $345 million for all of Midwest Air Group's outstanding shares, following last month's rebuffed $290 million offer for the carrier. While Midwest's management already has shunned the upped deal, AirTran is seeking a deal with shareholders. Representatives for AirTran and Midwest spent last Tuesday in court, as AirTran sought to gain access to shareholder information and appeal directly to holders of Midwest stock. AirTran this month proposed three nominees to Midwest's board of directors, to which Midwest replied that "AirTran has nominated this slate to allow AirTran's representatives, if elected, to push for a sale of Midwest to AirTran." Midwest last month said 2006 profit hit $5.4 million, following a loss of $64.9 million in 2005, while AirTran reported a net income of $15.5 million, up from $8.1 million in 2005.
US Air, America West To Integrate Res System In March
US Airways during its annual earnings conference call last week said it continues to integrate America West, and CEO Doug Parker plans to convert to a single reservation system in March. The carrier continues to integrate workforces and is working with labor unions on contracts that roll up to the merged carrier. Parker, meanwhile, said corporate revenue last year grew, given the expanded reach of the merged carriers. However, US Airways in the past year has limited the number of corporate contracts and Parker would not disclose revenue generated by corporate accounts.
Delta Seeks DOT Permission For 2008 China Route
Delta Air Lines last month filed an application with the U.S. Department of Transportation for authority to fly nonstop service between its Atlanta hub and Shanghai. "The application officially launches Delta's case for entry into the U.S.-China market under the 2004 U.S.-China Air Services Agreement," Delta said in a statement. The carrier didn't bid for the one DOT-sanctioned route allowance other domestic carriers aggressively vied for in 2006. United Airlines' Washington, D.C.-Beijing route application last month beat out applications from American, Continental and Northwest to serve a market in China from the United States. Delta is seeking to secure permission to begin service in March 2008, noting that "the 55 million people in the southeastern United States are dramatically underserved in terms of nonstop and one-stop service to China."
Sabre Acquisition On Track For Second-Quarter Close
Sabre Holdings Corp. late last month said the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 came and went without U.S. regulatory interference in regards to its sale to Texas Pacific Group and Silver Lake Partners. Meanwhile, the European Commission set March 2 as the deadline for its inquiry into the proposed transaction. CEO Sam Gilliland this month said the deal is on track to close early in the second quarter of 2007. Sabre last week held its last earnings call as a publicly traded company, reporting a 12 percent increase in revenue to $2.8 billion and a full-year profit of $233 million.
BridgeStreet Sale Provides Capital For Growth Plans
Following its purchase by a Dublin, Ireland-based private investment group, corporate housing unit BridgeStreet Worldwide is poised to "pursue strategic acquisitions in key U.S. and European markets," according to Bryan Turley, chief executive of investment group Sorrento Asset Management. Sorrento acquired BridgeStreet—which along with its network partners have about 10,000 corporate apartments worldwide—from Interstate Hotels & Resorts for $40.5 million in a deal announced last week. "Our partnership with Sorrento will open doors to multiple capital sources, which will allow us to fund our ongoing and future growth plans," according to BridgeStreet president and CEO Lee Curtis. Interstate CEO Thomas Hewitt said corporate housing no longer was part of the hotel management company's core strategy.
Starwood CEO: No Major Acquisitions Pending
During Starwood Hotels & Resorts Worldwide's fourth-quarter earnings conference call to investors on Thursday, CEO Steven Heyer said Starwood has no plans for any major acquisitions, such as operating companies, on the horizon. The company, however, still will consider acquiring brands or small groups of hotels, he said. Starwood signed 156 new long-term hotel contracts, a company record, in 2006 and will continue to focus on growth this year, Heyer said. The company also expects to increase revenue per available room this year by 8 percent to 10 percent.