AirTran Airways' hostile $290 million bid for Midwest Airlines Inc. was further muddied Thursday by Midwest's announcement that it has signed a contract with SkyWest Airlines Inc. to provide new feeder service under the Midwest brand.
AirTran last week went public with an offer for Midwest, more than a year after the Orlando-based airline first suggested a merger to its Oak Creek, Wis.-based rival. AirTran said its motivation in going public was based in part on its desire to do a deal before Midwest selects a new feeder partner and places a new jet order expected in 2007.
In the past, AirTran unsuccessfully has experimented with regional jet service like what SkyWest provides, so few believe the company has any desire to expand Midwest's regional service should it succeed in buying the company. An industry source said Thursday that while the contract was unlikely to cause AirTran to abandon the bid, it could motivate AirTran to move more quickly to sweeten its offer or provide other pressure to Midwest to consider a merger agreement.—Lou Whiteman
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