1. AirTran had argued that they would actually increase service to Milwaukee by making it a second hub. Northwest must have believed it.
2. Just how involved TPG is in AirTran is the critical question. AirTran probably would not have approved Midwest as we have known it. But this seems just as unlikely to do so. It is hard to imagine that control of the company by a shareholder group which is presumably dominated by NWA would do that. I would expect a move to "rationalize" routes by reducing "duplication" of routes offered by ... NWA.
3. I am not an antitrust expert. But, if I recall correctly, the combined market share in Milwaukee is very close to - if it does not exceed - the guidelines for problematic Hart-Scott-Rodino filings. The apparent move to forestall a competitive hub makes it even more vulnerable. AirTran cannot challenge the combination, but it seems likely to get heavy scrutiny from DOJ.
4. Sometimes large concentrations are OK if there are not significant barriers to new competitors entering the market. This can get to be a fairly complicated analysis. One problem for new competitors, I would think, is that the number of gates in any given market is finite. You can't come in and compete unless you get access to a gate.
5. But maybe the deal can survive such scrutiny if NWA is not a major investor or is otherwise effectively insulated from management decisions.
6. AirTran's statement that Midwest has frustrated the wishes of shareholders seems like sour grapes. The desire of shareholders is presumably for another quarter per share and for cash not AirTran stock. They got outbid.
7. Private equity groups do have a reputation for running up the numbers and then selling after a few years, although if NWA is in it to keep a competitor out, it would make no sense to do that.