Be Wary about Midwest's takeover by Northwest

[Eagle757shark]

Be wary about Midwest's takeover by Northwest

By JAY SORENSEN


Posted: Jan. 6, 2008

I believe within four years, Midwest Airlines will cease to exist as an independent entity. Northwest Airlines did the math and found it was cheaper to buy a small competitor than to risk the entry of AirTran Airways as a low-cost carrier smack in the middle of its so-called Heartland market area.
In this case, Northwest is strategically incapable of being a passive investor with TPG Capital. The experience at Duluth, Minn., may highlight why passivity is already a myth.
Midwest announced new flights to Duluth early in its takeover battle. The service was designed to connect Duluth with the Midwest network. Northwest had a lock on daily service prior to Midwest's three daily round trips. One other airline served Duluth, and it only operated flights on Wednesdays and Saturdays to Las Vegas.
Midwest began the Duluth service on March 4, 2007. The takeover involving Northwest was revealed on Aug. 12. On Oct. 19, Midwest announced it would drop Duluth. The city's business newspaper didn't mince words: "Northwest ownership likely affected Midwest decision to exit Duluth."
The following describes snippets of dialogue that could occur in Northwest's boardroom during the next four years:
Question: Why do we and Midwest have full staffing at these airports?
Answer: Let's look at merging operations and laying off some Midwest staff.
Question: Why does Midwest offer its own frequent flier program? Would we not achieve greater marketing power with WorldPerks as the only program for Milwaukee?
Answer: Of course, eliminating the Midwest program would give WorldPerks dominance.
Question: Why is Midwest competing with us on routes where we traditionally have dominated?
Answer: We can start by having Midwest drop Boston and Seattle and see how it goes. I think Milwaukee travelers really don't have a better choice than Northwest.
The final act of this play will be the de-hubbing of Milwaukee and the death of the Midwest brand - and here's the quote that will justify the move: "We tried over the years to keep Midwest as a standalone airline and to preserve its unique product. However, the financial challenges of the airline industry simply prevent us from maintaining this. But rest assured, Northwest is committed to the Milwaukee market."
I think we need to remind ourselves: Northwest has an unfortunate history of abandoning Milwaukee.
Glance at a map of the United States and decide for yourself. Does Northwest really want a fourth hub between Minneapolis, Detroit and Memphis? I think not. And if it merges with Delta (that's the rumor), you can add Cincinnati to the Heartland map.
Don't fool yourself. The leadership at MillerCoors already has connected the dots when comparing Milwaukee's aviation future with that of Denver (it has two hub airlines).
Sadly, we are in grave danger of losing the great economic engine of an airline hub in Milwaukee. I hope Milwaukee's leadership awakens to the fact that vital economic interests are at stake. Watching, waiting and hoping does not make a place great.
Jay Sorensen of Shorewood is an aviation consultant and a former Midwest Airlines marketing manager.

 

[Occam's Razor]

"...former Midwest Airlines marketing manager."

fired

Prolly cuz he was an "expert".

 

[Schwanker]

"...former Midwest Airlines marketing manager."
".

Sounds to me like someone is worried about their lifetime positive space first class seats and other perks going bye-bye!

Schwanker

 

[FlyWolf]

This guy was fired from Midwest because he dosn't know what he's talking about. He will never let it go, he's out to slam Midwest anytime he can.

 

[eprops]

..."I hope Milwaukee's leadership awakens to the fact that vital economic interests are at stake. Watching, waiting and hoping does not make a place great."...

Seems the the tranny would have been a better deal for that city. I realize that it's very unwanted but look at the plans they had. Midwest has been in a DIRE situation going all the way back to August 2000. They have only produced two quarters with a (very) small $$. I friend on the property said that furloughs were on they way but quietly pulled back due to the fact that they were to increase MKE service and jobs and are not. It was even said to have been on the cheif pilot hot line for a short time last month. The history is really weak, they have not been adding jobs. Heck did they replace the entire ramp ops in like 2004? Again, Airtran "claimed" to want to expand that city but I really don't think Midwest ever will.

 

[RIDETHELIGHTING]

FL is giving it a try our orders of 737 start back up in Feb, so will see what happens

 

[maxblast72]

Airtran now has 4 gates in MKE and is buying additional ground equipment to support increased flying. I would have to imagine at least 20-25 flights a day by summertime with the additional gate acquisition.

Is the official word still 10 new B737 for 2008?

 

[GOULET!]

AirTran's 4 gates are going to do nothing to harm Midwest. They will be flights to western cities and Florida that are low yeild. Lets see Trannie follow through on their big expansion plans in MKE and try those new routes they were all promising us like to Buffalo and Montreal. If Forklift Joe had any intelligence he would have already expanded Trannie all over the Carribean and Mexico. Unfortunately for AirTran, they have missed a huge opportunity already.

 

[Max Powers]

Joe L. no longer exists at Da Tranny......even the last two years he was just a chairman incognito.

 

[Kharma Police]

AirTran's 4 gates are going to do nothing to harm Midwest. They will be flights to western cities and Florida that are low yeild. Lets see Trannie follow through on their big expansion plans in MKE and try those new routes they were all promising us like to Buffalo and Montreal. If Forklift Joe had any intelligence he would have already expanded Trannie all over the Carribean and Mexico. Unfortunately for AirTran, they have missed a huge opportunity already.

Wow, you should leave your Skyway gig and go work for Michael Boyd!!!