EX-99.1 2 dex991.htm JANUARY 25, 2007 REVISED CONFERENCE CALL PRESENTATION MATERIALS January 25, 2007 Revised Conference Call Presentation Materials
Investor Presentation
January 2007
Exhibit 99.1

1
Notice Regarding Forward-Looking Statements
Statements in this presentation that are not historical are “forward-looking
statements.”
These forward-looking statements may state Midwest Air Group’s or
management’s intentions, hopes, beliefs, expectations or predictions for the future. 
Words such as “expect,”
“anticipate,”
“believe,”
“estimate,”
“goal,”
“objective”
or
similar words are intended to identify forward-looking statements.  It is important to
note that our actual results could differ materially from the projected results
contained in these forward looking statements.  Factors that may
cause such a
difference to occur include, but are not limited to, fees and expenses incurred in
connection with AirTran’s
unsolicited exchange offer and the risk factors described
in “Item 1A. Risk Factors”
in Midwest Air Group’s Annual Report on Form 10-K for
the year ended December 31, 2005.

2
Agenda For Today’s Discussion
•
AirTran’s Offer is Inadequate and Opportunistic
•
Midwest’s Strategic Plan Creates Long-Term Value
•
Correcting the Record
•
Midwest’s Board Recommends Against AirTran’s Offer

3
October 20, 2006
AirTran
sends letter to Midwest Board proposing to acquire Midwest
for $11.25/share (non-specific on split between cash and stock)
December 7, 2006
Midwest Board rejects AirTran
offer
December 13, 2006
AirTran
makes public its proposal to acquire Midwest for $11.25 per
share (non-specific on split between cash and stock)
January 11, 2007
AirTran
makes public exchange offer for all shares of Midwest at a
nominal price of $13.25/share (50% cash / 50% stock)
January 24, 2007
Midwest Board recommends against AirTran’s
offer
June 30, 2005
AirTran
sends letter to Midwest proposing to acquire Midwest for
$4.50/share
July 20, 2005
Midwest rejects $4.50/share offer
Summary of Key Events

4
AirTran’s
Offer is Inadequate and Opportunistic
•
AirTran’s
offer undervalues Midwest
–Midwest’s shareholders are poised to benefit from company’s
investment and execution of its strategic plan
•
Midwest has benefited from significant business and financial
momentum
–Midwest stock up 167% over past 12 months
–Traffic growth of 21.5% in 2006
–Unit revenue growth of 12.5% in 2006
•
Market conditions in the industry will continue to improve and
increasingly favor high quality carriers like Midwest

5
Midwest’s Cash Funds Substantially All of the Cash
Portion of AirTran’s
Offer
•
Midwest’s total cash balance as of 12/31/06 approximately
$158mm
–Represents more than 92% of AirTran’s
cash funding
requirement
•
Midwest cash represents more than $6/share

6
Agenda For Today’s Discussion
•
AirTran’s Offer is Inadequate and Opportunistic
•
Midwest’s Strategic Plan Creates Long-Term Value
•
Correcting the Record
•
Midwest’s Board Recommends Against AirTran’s Offer

7
The Board Believes Midwest’s Strategic Plan Will
Create Superior Long-Term Value
•
Midwest’s strategic plan is expected to create greater value for
shareholders than AirTran’s proposed offer
•
Midwest shareholders are poised to benefit from Midwest’s
investments and industry rebound
•
Midwest’s planned addition of routes and service expected to
increase capacity by 15% in 2007
•
Midwest’s fleet flexibility and diversification allows company to
generate superior value across a variety of markets

8
Revenue
EBITDAR*
EPS
>$825
$766
$104
>$120
>$16 (+15%)
$0.88
>$1.70
Current IBES
Management Plan
Increase
>$59 (+8%)
>$0.82 (+93%)
The Board Believes Midwest’s Strategic Plan Will
Create Superior Long-Term Value
* 2007 estimated EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) is considered to be a non-GAAP financial measure. 
Midwest
believes
that
this
non-GAAP
measure,
when
presented
in
conjunction
with
comparable
GAAP
measures,
is
useful
because
that
information
is
an
appropriate
measure
for
evaluating
Midwest’s
operating
performance
as
these
costs
are
not
directly
attributable
to
the
underlying
performance
of
its
business
operations.  Internally, Midwest uses this non-GAAP information as an indicator of business performance and management’s effectiveness.  This measure should be
considered
in
addition
to,
not
a
substitute
for,
or
superior
to,
measures
of
financial
performance
prepared
in
accordance
with
GAAP.
2007E

9
The Board Believes Midwest’s Strategic Plan Will
Drive Growth
•
Fleet expansion and diversification driving growth
–
Skywest agreement for CRJ service in 2Q/07
•
Annualized revenue impact projected to be $150 million
•
Allows for redeployment of B717s and 328JETs to new opportunities
–
2 additional MD-80s put into service in 2Q/07
•
Annualized revenue impact projected to be $50 million
–
Premium upgrades on MD-80s in 4Q/07
•
Annualized revenue impact projected to be $5 million
–
Evaluating future fleet replacement for MD-80’s and growth aircraft
•
Analyzing replacement with either A320s or 737-800’s

10
Last
twelve
months
stock
performance
per
Bloomberg
as
of
January
24,
2007
(1)
Includes JetBlue, Southwest, WestJet and Frontier.
(2)
Includes AMR Corp, UAL Corp, Alaska Airlines, Continental, and U.S. Airways.
Midwest Shareholders Are Seeing Benefits from
Investment
40%
70%
100%
130%
160%
190%
220%
250%
280%
310%
Jan-2006
Mar-2006
May-2006
Jun-2006
Aug-2006
Oct-2006
Dec-2006
Jan-2007
Airtran
Midwest
Network Carriers (1)
Low Cost Carriers (2)
64.9%
167.3%
5.5%
(28.3%)
Public announcement of
AirTran’s
December 13
th
Offer

11
Data for Midwest Air Group
Kansas City -
#2 Market Share
Milwaukee -
#1 Market Share
0%
10%
20%
30%
40%
50%
60%
2001
2002
2003
2004
2005
Q3
2006
0%
2%
4%
6%
8%
10%
12%
2001
2002
2003
2004
2005
Q3
2006
Midwest Has Shown Improved Market Share

12
RASM / CASM
RPM/ASM Growth –
Percent of 2000 Levels
90%
100%
110%
120%
130%
140%
150%
160%
170%
180%
190%
200%
2000
2001
2002
2003
2004
2005
2006
ASMs
RPMs
$0.00
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
2000
2001
2002
2003
2004
2005
2006
Total CASM
CASM Ex-Fuel*
RASM
Data for Midwest Airlines
Midwest Shareholders are Seeing Benefits from
Improved Operating Performance
Data for Midwest Air Group.  Scheduled service only
* CASM ex-fuel is a non-GAAP financial measure.  Reconciliation to GAAP included in SEC filings.

13
EBITDAR*
EPS**
Revenue
$0.29
($3.71)
2005
2006
$80.0
$17.9
2005
2006
$664.5
$523.0
2005
2006
Midwest Management Plan is Driving Strong
Performance
*EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) is considered to be a non-GAAP financial measure.
Midwest
believes
that
this
non-GAAP
measure,
when
presented
in
conjunction
with
comparable
GAAP
measures,
is
useful
because
that
information
is
an
appropriate
measure
for
evaluating
Midwest’s
operating  performance as these
costs are not directly attributable to the underlying performance of its business operations.  Internally, Midwest uses this non-GAAP information as an indicator of business performance and management’s effectiveness.  This measure
should be considered in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
**Includes $0.89 of EPS charge from impairment in third quarter 2005 for Midwest. 

14
AirTran**
Midwest*
$0.25
($2.33)
2H 2005
2H 2006
($0.10)
$0.01
2H 2005
2H 2006
Midwest’s EPS has Outpaced AirTran’s
Projected EPS
*Includes $0.89 of EPS charge from impairment in third quarter 2005 for Midwest. 
**AirTran
second half EPS based on IBES median.

15
AirTran
RASM*
11.0
cents
12.3
cents
Q42005
Q42006
9.8 cents
9.1 cents
Q42005
Q42006
Midwest’s Superior Operating Performance
Midwest RASM
AirTran
Load Factor
Midwest Load Factor
73.8%
67.4%
Q42005
Q42006
69.0%
71.5%
Q42005
Q42006
*Q42006 RASM assumes midpoint of 6.5%-7.5% RASM decline per Company guidance.
~

16
Agenda For Today’s Discussion
•
AirTran’s Offer is Inadequate and Opportunistic
•
Midwest’s Strategic Plan Creates Long-Term Value
•
Correcting the Record
•
Midwest’s Board Recommends Against AirTran’s Offer

17
•
Many of AirTran’s focus cities are “underserved ”
by AirTran’s definition
compared to Milwaukee and Kansas City
Population
(MM) w/in 25mi
Daily Seats
Daily Flights
0.7
1.1
1.0
6.4
3.3
1.3
1.5
1.1
1,991
2,721
5,299
37,520
41,045
15,392
14,224
22,858
28
37
77
291
333
179
208
216
FNT
CAK
DAY
MDW
BWI
IND
Milwaukee
Kansas
City
AirTran “Focus Cities”
Midwest Hubs
Population Data –
US Census Bureau
12/06 Flight/Seat Data -
APGDAT
Milwaukee and Kansas City are Well Served Markets

18
Milwaukee Market is Fairly Priced
•
There is only a 3%-4% difference
between Milwaukee and Chicago
airfares based on ALL air traffic
through Chicago
•
By discussing Midway fares only,
AirTran
excludes 71% of Chicago
market to make claim that
Milwaukee is “overpriced”
Source: APGDAT 2Q06
3%
$132
$136
Average
2%
$132
$135
Washington –
DCA
2%
$115
$116
Tampa
-46%
$226
$155
San Francisco
56%
$81
$183
Pittsburgh
6%
$134
$143
Phoenix
14%
$121
$141
Philadelphia
-3%
$113
$110
Orlando
15%
$129
$153
Newark
11%
$138
$156
New York -
LGA
31%
$101
$146
Minneapolis
-10%
$166
$151
Los Angeles
-8%
$136
$126
Las Vegas
49%
$89
$174
Kansas City
11%
$118
$132
Ft. Myers
3%
$118
$121
Ft. Lauderdale
1%
$126
$127
Denver
12%
$133
$162
Dallas/Ft. Worth
-2%
$152
$149
Boston
5%
$121
$128
Baltimore
-28%
$165
$121
Atlanta
% Diff
Chicago -
ORD &
MDW
Milwaukee

19
Regional Jets Continue to Add Value
•
Midwest service allows smaller cities to access the rest of the country
–
Regional jets are essential for connectivity from smaller markets
–
Flexibility
of
fleet
size
allows
fit
to
market
size
and
customer
needs
•
Midwest provides service to 24
routes from Milwaukee that are smaller than
AirTran’s smallest route
–
Likely that AirTran would abandon those routes
•
AirTran’s
failed experiment with regional jets colors its view of Midwest’s
successful regional jet program

20
AirTran
Lacks Long-Term Commitment to New
Markets
•
In
2004,
AirTran
set
Dallas
up
as
a
“mini-hub”
with
nonstop
flights
from
DFW
to seven major cities
–
Today
AirTran
serves
only
three
of
those
cities
from
Dallas
•
AirTran said it would have 30 flights/day from DFW by end of 2004
–
Today AirTran has eight
daily departures from Dallas
•
Since 2004, AirTran has dropped
a total of 24
markets

21
AirTran
Lacks Long-Term Commitment to New
Markets
9
8
Cities
26
32
Departures
Chicago
Midway
5
9
Cities
18
21
Departures
Philadelphia
3
5
Cities
8
17
Departures
Dallas
3
4
Cities
6
13
Departures
Pittsburgh
2
3
Cities
7
16
Departures
Washington
Dulles
March 2007
Peak
City
Source: Published Schedule for March 2007

22
AirTran
Will Have Difficulty Achieving $60mm of
Synergies Without Milwaukee Job Losses
•
Potential reduction of hundreds of jobs from Milwaukee region
–
Significant overlap in administrative and executive positions ranging
from IT to purchasing to environmental and more…
–
AirTran
recently built new maintenance and reservations facilities so
unlikely to keep those positions in Milwaukee
–
Any non-hub destinations currently served by both carriers would
combine and eliminate jobs

23
Agenda For Today’s Discussion
•
AirTran’s Offer is Inadequate and Opportunistic
•
Midwest’s Strategic Plan Creates Long-Term Value
•
Correcting the Record
•
Midwest’s Board Recommends Against AirTran’s Offer

24
Midwest’s Board Recommends Against AirTran’s
Offer
The Board has determined that:
•
AirTran’s
offer is inadequate because it does not fully reflect the long-term value
of Midwest’s strategic plan
•
The timing of AirTran’s
offer is opportunistic and disadvantageous to Midwest
shareholders
•
The
value
of
the
consideration
being
offered
by
AirTran
is
uncertain
and
highly
dependent
on
the
value
of
AirTran
common
stock
•
AirTran’s
acquisition of Midwest would not serve the interests of Midwest’s
employees, suppliers and customers and the communities in which Midwest
operates
•
AirTran’s
offer is subject to numerous conditions, which results in significant
uncertainty that the offer will be consummated

Appendix

26
Reconciliation Between Net Income and EBITDAR
Midwest believes that this non-GAAP measure, when presented in conjunction with comparable GAAP
measures, is useful because that information is an appropriate measure for evaluating Midwest’s
operating  performance as these costs are not directly attributable to the underlying performance of its
business operations.  Internally, Midwest uses this non-GAAP information as an indicator of business
performance and management’s effectiveness.  This measure should be considered in addition to, not
a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Net income as reported ($000)
$5,412
$(64,886)
Less: 
Interest income
(7,701)
(3,723)
Interest expense
3,283
3,581
Tax
(403)
(140)
Depreciation and amortization
15,178
16,001
Impairment Loss
0
15,622
Aircraft Rentals
64,215
51,468
$74,572
$82,809
EBITDAR
$79,984
$17,923
2006
2005
Twelve Months Ended December 31

Investor Presentation
January 2007