Airline Projects 10% Growth Over Next Three Years

Midwest Air Group, Incorporated -- parent company of Midwest Airlines -- declined a proposed merger agreement with AirTran Holdings yesterday.

According to Timothy E. Hoeksema, chairman and chief executive officer, the Midwest Air Group board of directors spent considerable time and effort evaluating AirTran's offer of $11.25 per share in cash and AirTran stock. As part of Midwest's evaluation, the board engaged investment banking firms and an outside consulting firm.

"During their comprehensive review, those advisors considered the offer in light of Midwest's business and strategic plans," explained Hoeksema. "Under our strategic plan, we are projecting annual capacity growth of more than 10% over the next three years including a 50-seat regional jet program, along with significantly greater growth in profitability. Additionally, we view AirTran's offer at only about $5 per share, because it includes approximately $6 per share in cash that already belongs to our shareholders."

The Midwest board determined that pursuing a merger with AirTran would not be in the best interests of the company, its shareholders and other stakeholders - including customers, employees and the communities the airline serves.

"While it is the fiduciary obligation of the board of directors to review credible offers, the board unanimously concluded that Midwest's business plan as a stand-alone company would support a considerably better return to our shareholders than AirTran's offer," Hoeksema said. "We are successful because we provide customers with an exceptional travel experience. Our product and service are unique, and are not readily compatible with a merger with another carrier."

Hoeksema added that employees of Midwest have been overwhelmed by the groundswell of public support of the board's decision since the news became public yesterday. "We are very fortunate to have customers and shareholders who enthusiastically support our decisions and appreciate our efforts to provide 'The best care in the air.' We are very proud to be Milwaukee's hometown airline."

Midwest Airlines features jet service throughout the United States and claims Milwaukee's most daily nonstop flights to major destinations. Catering primarily to business travelers and upscale leisure travelers, the airline bills itself as "The best care in the air."

Skyway Airlines, Inc. - Midwest's wholly owned subsidiary - operates as Midwest Connect and offers connections to Midwest Airlines as well as point-to-point service between select markets on regional jet and turboprop aircraft. Together, the airlines offer service to 47 cities.

FMI: www.midwestairlines.com