long but a good read
this is a pretty good story about one guys position on this whole situation
Such an interesting spat between AirTran and NWA. I’m going to add my commentary on the subject. So much to discuss, where to begin?
I guess I’ll start with a little history. NWA has three US hubs in Memphis, Minneapolis and Detroit. In Memphis, AirTran has a minor presence and competes with 5 daily flights to Atlanta. AirTran has never added flights to Orlando or BWI as I thought they might or should. They are the only low fare airline in Memphis. In Minneapolis, AirTran now has 4 daily flights to Atlanta and 1 daily to Orlando. Just before AirTran announced they were entering MSP, NWA announced a HUGE increase in seats to Atlanta running a bunch of RJs down there. That forced AirTran to quickly change the route to MSP-MDW with continuing service to ATL. Ultimately that route did not work out well as ATA started MSP-MDW and had all of the connecting feed through MDW to support it. Ultimately, AirTran shifted to MSP-ATL when I presume NWA took some seats out of the route. AirTran has never entered Detroit until now. Previously, I believe it was AirTran’s plan to bracket the Motor City in Flint and Toledo, similar to LUV bracketing Boston with Providence, RI and Manchester, NH. As we all know, Toledo support was poor and AirTran pulled out.
AirTran has done extremely well in FNT over the years, second probably only to CAK in the Midwest as far as loads and yields go. At first, NWA let this go. Recently NWA has become aggressive in this market, matching AirTran routes to Orlando, Tampa, Ft. Lauderdale and Las Vegas. This forced AirTran to pull out of the FNT-TPA market and move into the FNT-Ft. Meyers market which they announced last week.
NWA should have learned from Delta’s mistake, because it’s going to be as costly to NWA as it has been to Delta. Several years ago, AirTran was flying to secondary markets to avoid taking on Delta directly and “fly under the radar.” When Delta added flights to CAK from ATL, AirTran said enough. I remember the conference call where Joe or Stan simply said, if Delta is going to come into our secondary markets, then we’re going to go into their primary markets where the number of fliers are greater. After than AirTran entered DEN, LAX, LAS, SFO, and other larger markets. Delta has lost millions in revenue from the competition on these major routes. If only they’d let AirTran have their secondary markets.
Fast forward to today. I couldn’t believe this morning’s announcement of new service to Detroit. That wasn’t near my top 10 list of cities to expand to. I think it had everything to do with AirTran’s response to Delta, which is, if NWA is going to try to knock AirTran off some secondary markets, then NWA is going to pay with depressed yields out of their larger markets. Realize that NWA has beefed up service in Indy and Milwaukee as well, two cities AirTran has tried to expand aggressively in. It is going to get ugly for NWA because AirTran has a strong enough route structure in place, that if the prize is big enough, and Detroit is, AirTran can stay in the game a long time.
NWA’s response today was telling of a vengeful company that was completely blindsided. The angry senior execs probably woke the VP of network planning up at 5:31 AM and said “get back at AirTran.” Their press release announcing the new FNT-Ft Meyers route, to compete directly with AirTran had to be concocted today. The quote was from the vice president of network planning & revenue management. No one from the FNT airport was quoted, since I’m sure no one at FNT was involved in the process, unlike AirTran’s announcement which had quotes from two top Bishop International execs about how they were looking forward to AirTran’s service.
So what’s the next shot? There’s some expansion that I’ve thought for a long time would make sense for AirTran and would really stick it to NWA at the same time. I believe AirTran should start twice daily flights from MSP to BOS and a third flight that goes MSP-CAK-BOS, that ties in with a current CAK-BOS route. The MSP-CAK route should be timed as well to offer MSP-CAK-LGA and connections to Florida. Currently in MSP, the only low cost carrier is Sun Country and their only flight to the northeast is into JFK. In my opinion, BOS is still up for grabs, until JetBlue builds up their operation there. It will take JetBlue awhile as they concurrently are starting a little battle with Continental at Newark. This would drop prices on two major business markets MSP-BOS and MSP-LGA and help shore up the CAK-BOS and CAK-LGA routes. This would be a less than subtle message to NWA to leave AirTran alone on secondary markets or prepare to have the fortresses invaded. I believe NWA has made a costly mistake in FNT and it’s going to cost them millions.
As always, just my 0.02
