Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
How Many Airlines Did NW Put Out Of Business?  
User currently offlineSNCntry32 From United States of America, joined Jan 2007, 1520 posts, RR: 0
Posted (4 years 7 months 3 weeks 4 days 4 hours ago) and read 10197 times:

So now that the mighty and powerful red tailed moffia is one for the history books, I was just wondering in assuming that Northwest put these following airlines out of business essentially.

ATA- Northwest won military charter business from them, did they not? And cargo bizz too.

ABX Air- Pulled cargo contracts?

Midwest Airlines- Left them to die a slow painful death?

Reno Airlines- After Reno set up shop in MSP, didnt Northwest do the same with predatory pricing and shortly after they folded?

Sun Country- Well I know SY is still around, but Sun Country started to fly into key Northwest markets. Of course, they didnt take to lighty to this and a few weeks later they were in CH7

Please let me know if I have my stories straight or if I am competly off, but man do I miss Northwest...


Long Live Memphis!
20 replies: All unread, jump to last
 
User currently offlineNASBWI From Bahamas, joined Feb 2005, 1320 posts, RR: 0
Reply 1, posted (4 years 7 months 3 weeks 4 days 4 hours ago) and read 10103 times:

Quoting SNCntry32 (Thread starter):
ATA- Northwest won military charter business from them, did they not? And cargo bizz too.

I wouldn't go so far as to say that NW put them out of business. I'd venture to say that ATA did that all on their own. Their expertise was charter services from their inception. Their foray into scheduled services, along with other business decisions, proved to be their undoing. After all, there are a few other carriers still earning revenue from their military contracts. Omni and World come to mind.

Quoting SNCntry32 (Thread starter):
ABX Air- Pulled cargo contracts?

I wasn't aware the ABX was out of business. I could've sworn I just saw one of their B762F's in BWI a week ago or so...

Quoting SNCntry32 (Thread starter):
Midwest Airlines- Left them to die a slow painful death?

Eh, don't know enough about that, but my opinion would be that although NW owned a stake in YX, there were many other contributing factors leading to YX's demise - or rather, merge with Republic.

Quoting SNCntry32 (Thread starter):
Reno Airlines- After Reno set up shop in MSP, didnt Northwest do the same with predatory pricing and shortly after they folded?

Reno Airlines really didn't "fold"; they were merged with AA.



Fierce, Fabulous, and Flawless ;)
User currently offlinesunking737 From United States of America, joined Feb 2005, 2057 posts, RR: 9
Reply 2, posted (4 years 7 months 3 weeks 4 days 4 hours ago) and read 10101 times:

Quoting SNCntry32 (Thread starter):
Sun Country- Well I know SY is still around, but Sun Country started to fly into key Northwest markets. Of course, they didnt take to lighty to this and a few weeks later they were in CH7

Way off. It was 9-11 and bad management (William E. La Macchia Sr & Jr) that caused SY down fall. Jr as the son was called brought in all his friends to "run" the company. They made a mistake going up against the Red Tailed shark, but it was not only NWA. I was employed at SY. Many felt they ran the company into the ground as they pushed out many good and experienced employees out the door.

For a history of SY please see this link..... http://www.braniffpages.com/syhistory.html



Just an MSPAVGEEK
User currently offlineburnsie28 From United States of America, joined Aug 2004, 7557 posts, RR: 8
Reply 3, posted (4 years 7 months 3 weeks 4 days 1 hour ago) and read 9702 times:

Quoting SNCntry32 (Thread starter):
Reno Airlines- After Reno set up shop in MSP, didnt Northwest do the same with predatory pricing and shortly after they folded?

Reno Air was taken over by AA in a hostile transaction. RA did fine after NW left the RNO retaliation market.

Quoting SNCntry32 (Thread starter):
ATA- Northwest won military charter business from them, did they not? And cargo bizz too.

Northwest won the military charter and many other charter contracts yes, but ATA's move into scheduled service and not offering a FF program was the killer for them.

Quoting NASBWI (Reply 1):
Reno Airlines really didn't "fold"; they were merged with AA.

It was a hostile takeover by AA actually.



"Some People Just Know How To Fly"- Best slogan ever, RIP NW 1926-2009
User currently offlineatrude777 From United States of America, joined Aug 2003, 5700 posts, RR: 52
Reply 4, posted (4 years 7 months 3 weeks 4 days 1 hour ago) and read 9675 times:

Quoting burnsie28 (Reply 3):
and not offering a FF program was the killer for them.

ATA offered a FFP, called ATA Travel Awards.

Alex



Good things come to those who wait, better things come to those who go AFTER it!
User currently offlinefloridaflyboy From United States of America, joined Jun 2006, 2016 posts, RR: 0
Reply 5, posted (4 years 7 months 3 weeks 3 days 16 hours ago) and read 8715 times:

Quoting SNCntry32 (Thread starter):
ABX Air- Pulled cargo contracts?

Not even close! ABX didn't haul freight for NW. NW and ABX both flew cargo for DHL out of the ILN hub. When DHL decided to restructure the US operation, they essentially pulled the cargo contracts from all (NW, ABX Air (USA)">GB, Astar) and then reallocated the new flying in CVG back to ABX, but in a MUCH smaller operation, minus the DC-9s and about half the 767s. ABX is still an operating carrier with a fleet of around 25 767s.



Good goes around!
User currently offlineisitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 6, posted (4 years 7 months 3 weeks 3 days 15 hours ago) and read 8367 times:

NW didnt put any airline out of business. As a businessman, I can tell you the other airlines put themselves out
of business by making some bad mistakes or by not keeping up with the Joneses.
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineMacsog6 From Singapore, joined Jan 2010, 535 posts, RR: 0
Reply 7, posted (4 years 7 months 3 weeks 3 days 15 hours ago) and read 8259 times:
Support Airliners.net - become a First Class Member!

Quoting SNCntry32 (Thread starter):
Reno Airlines- After Reno set up shop in MSP, didnt Northwest do the same with predatory pricing and shortly after they folded?

QQ merged into AA, not a hostile takeover. Unfortunately, QQ's west coast routes were largely shut down by AA over time.



Sixty Plus Years of Flying! "I fly because it releases my mind from the tyranny of petty things." - Saint Ex
User currently offlineburnsie28 From United States of America, joined Aug 2004, 7557 posts, RR: 8
Reply 8, posted (4 years 7 months 3 weeks 3 days 15 hours ago) and read 8233 times:

Quoting atrude777 (Reply 4):
ATA offered a FFP, called ATA Travel Awards.

Alex

It wasn't until well after that, they tried adding that to try and take passengers back from NW in IND, by then it was far too late and only lasted the time towards the end of their demise. It wasn't offered long enough.



"Some People Just Know How To Fly"- Best slogan ever, RIP NW 1926-2009
User currently offlinevctony From United States of America, joined Aug 1999, 455 posts, RR: 0
Reply 9, posted (4 years 7 months 3 weeks 3 days 15 hours ago) and read 8149 times:

You forgot about Pro Air. That is probably the one airline that NW may actually have put out of business.

User currently offlineFlyMeToTheMoon From United States of America, joined Jul 2004, 242 posts, RR: 1
Reply 10, posted (4 years 7 months 3 weeks 3 days 14 hours ago) and read 7675 times:

Why does it matter? Putting your competitors out of business is quite acceptable a business tactic, in fact quite advisable too! If they were better, smarter, cheaper, more cunning, etc, so much better for them and their staff and shareholders.


Fly me to the moon... but not through LHR!
User currently offlineCubsrule From United States of America, joined May 2004, 23203 posts, RR: 20
Reply 11, posted (4 years 7 months 3 weeks 3 days 11 hours ago) and read 6047 times:

Quoting burnsie28 (Reply 8):
It wasn't until well after that, they tried adding that to try and take passengers back from NW in IND, by then it was far too late and only lasted the time towards the end of their demise.

Well after what? They added the program in early 2003.

Quoting SNCntry32 (Thread starter):
Northwest won military charter business from them, did they not?

If you want to blame someone for the movement of that business, blame FX, who moved it from TZ to NW.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineua76heavy From United States of America, joined Apr 2007, 181 posts, RR: 0
Reply 12, posted (4 years 7 months 3 weeks 3 days 10 hours ago) and read 5865 times:

Quoting FlyMeToTheMoon (Reply 10):
Why does it matter? Putting your competitors out of business is quite acceptable a business tactic, in fact quite advisable too!

Not quite. If by doing so it creates a monopoly, then the Justice Department, other regulatory government agencies and perhaps legislative investigative committees and consumer advocacy groups step in to scrutinize and publicize your practices, which may place you in a worse position. For example, you can pretty much say that HA tolerates go! Mokulele so it doesn't create a monopoly in the Hawai'i interisland market.


User currently offlineFlyMeToTheMoon From United States of America, joined Jul 2004, 242 posts, RR: 1
Reply 13, posted (4 years 7 months 3 weeks 3 days 10 hours ago) and read 5593 times:

Quoting ua76heavy (Reply 12):
Not quite. If by doing so it creates a monopoly, then the Justice Department, other regulatory government agencies and perhaps legislative investigative committees and consumer advocacy groups step in to scrutinize and publicize your practices, which may place you in a worse position. For example, you can pretty much say that HA tolerates go! Mokulele so it doesn't create a monopoly in the Hawai'i interisland market.
Quoting ua76heavy (Reply 12):
Not quite. If by doing so it creates a monopoly, then the Justice Department, other regulatory government agencies and perhaps legislative investigative committees and consumer advocacy groups step in to scrutinize and publicize your practices, which may place you in a worse position. For example, you can pretty much say that HA tolerates go! Mokulele so it doesn't create a monopoly in the Hawai'i interisland market.

Coming from China I find the comment quite ironic and amusing. As long as one does not fll afoul of laws on the books (e.g. becoming a monopoly) putting competitors out of business is acceptable business practice an in fact very frequently encountered in free market economies. Competitors are put out of business in many other countries as well but usually through the heavy handed intervention of a generally authoritarian regime (Russia - Yukos; China - countless examples) which is much more to condemn than the forces of a free market economy.



Fly me to the moon... but not through LHR!
User currently offlineswalifebtw From , joined Dec 1969, posts, RR:
Reply 14, posted (4 years 7 months 3 weeks 3 days 9 hours ago) and read 5337 times:

Lets not forget about the original Midway Airlines (ML). NW was planning on a merger then bailed out on the 11th hour leaving ML to call it quits the next day.

User currently offlineavconsultant From United States of America, joined Feb 2006, 1360 posts, RR: 2
Reply 15, posted (4 years 7 months 3 weeks 3 days 6 hours ago) and read 4254 times:

Quoting Cubsrule (Reply 11):
If you want to blame someone for the movement of that business, blame FX, who moved it from TZ to NW.

Exactly!! FX is a 500 lb gorilla when it comes to government business. When McArtor {sp?} returned to FX after heading up the FAA, he positioned FX very well with not only Gov't contracts, but managing the Gov't contracts.

Quoting swalifebtw (Reply 14):
Lets not forget about the original Midway Airlines (ML). NW was planning on a merger then bailed out on the 11th hour leaving ML to call it quits the next day.

In regards to the NW/ML buyout, NW had no choice but to back out. During the due diligence ML financials were not adding up. While some accused ML of cooking the books an investigation revealed they were not using GAAP accounting. By law, NW could not carry out the buyout without going back to the Board of Directors.


User currently offlinebrilondon From Canada, joined Aug 2005, 4385 posts, RR: 2
Reply 16, posted (4 years 7 months 3 weeks 3 days 6 hours ago) and read 4236 times:

Quoting SNCntry32 (Thread starter):
ATA- Northwest won military charter business from them, did they not? And cargo bizz too.

This was just what happens in a competiive market which is in a recession at the moment.

Quoting SNCntry32 (Thread starter):
Reno Airlines- After Reno set up shop in MSP, didnt Northwest do the same with predatory pricing and shortly after they folded?

Reno was taken over by AA as stated above and had nothing to do with NW except that in the market where they were directly competitive.



Rush for ever; Yankees all the way!!
User currently offlineisitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 23
Reply 17, posted (4 years 7 months 3 weeks 3 days 5 hours ago) and read 3743 times:

Quoting avconsultant (Reply 15):
In regards to the NW/ML buyout, NW had no choice but to back out. During the due diligence ML financials were not adding up. While some accused ML of cooking the books an investigation revealed they were not using GAAP accounting. By law, NW could not carry out the buyout without going back to the Board of Directors.

Yep.
As I stated before, NW didnt put anyone out of business. The Q here is how and why did Midwest get into to their predicament in the first place? Could it have been the gradual build- up and ever growing competition of Southwest at Midway?

yeah............................
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlinesmoot4208 From United States of America, joined Jan 2010, 1321 posts, RR: 12
Reply 18, posted (4 years 7 months 3 weeks 3 days 4 hours ago) and read 3444 times:

Did NW outbid Champion Air for the NBA team charters?

User currently offlinetexan From New Zealand, joined Dec 2003, 4283 posts, RR: 52
Reply 19, posted (4 years 7 months 3 weeks 3 days 3 hours ago) and read 3344 times:

Quoting SNCntry32 (Thread starter):
Please let me know if I have my stories straight or if I am competly off, but man do I miss Northwest...
Quoting vctony (Reply 9):
You forgot about Pro Air. That is probably the one airline that NW may actually have put out of business.

Safe has it right: an airline like Northwest certainly did not help any airline succeed, but that is just a byproduct of a poor business plan. Pro Air, for example, had a neat idea but couldn't meet projections. They operated from an unpopular airport to key business markets already saturated with other airlines' frequent fliers. With most of the other carriers mentioned and that I can think of -- Midwest, Reno, Western Pacific -- Northwest competed with the carriers on a limited basis. Yes, Northwest opened a small, short-lived focus city out of Milwaukee, but they neither covered the Midwest network nor imposed fares anticompetitively.

A dominant carrier may run an airline out of a market, but not out of business. Here is where we ask, "Did the dominant carrier violate antitrust laws?" There are only a couple of guidelines here. First is the antitrust settlement against American Airlines by the Department of Justice. The DOJ claimed that American violated antitrust laws by setting fares below cost, flooding the market with seats, and retreating from the market and raising fares as soon as it had driven the other carrier from the market. The DOJ said this occurred in multiple instances: DFW-COS against Western Pacific; DFW-MCI, DFW-PHX, and DFW-ICT against Vanguard; and DFW-LGB, DFW-TPA, DFW-EWR, and DFW-OAK against SunJet.

Spirit took Northwest to court over anticompetitive actions on the DTW-BOS and DTW-PHL routes. The District Court granted Northwest summary judgment. Spirit appealed to the Sixth Circuit, who heard the case. Before the Sixth Circuit could decide the case, Northwest entered Chapter 11 and the court proceeding, because of our bankruptcy laws, was stayed. Both parties consented to have the court issue a ruling, though. The Sixth Circuit found that Northwest behaved in a manner that arguably violated antitrust laws and, had Northwest not been in bankruptcy, would have remanded the case to the District Court to proceed to a jury trial.

The problem is we don't really know how courts will finally decide this issue. Taking guidance from the Sixth Circuit, a carrier may be violating antitrust laws when it 1) floods a market with seats, contravening previous plans, due to a new entrant; 2) prices those seats below the cost to operate (which is a difficult standard to prove. American would have violated this part because they admitted in letters and internal memos that a price above the price at which they were offering seats was their break even price); 3) engages in monopolistic practices at an airport to prevent a competitor from gaining access (alleged in the Northwest case, not the American settlement, so this is not a hard and fast rule); and 4) raises fares or reduces service to at or near pre-competition levels after the complaining carrier abandons the route.

Northwest likely did this in some cases -- against Western Pacific, against Reno Air, against Spirit, maybe against Pro Air and others -- but none of these individual situations caused any airline to go out of business. Spirit, in fact, adjusted it's business plan and is now a pretty successful carrier, despite competing against Northwest in multiple markets. Frontier, too, continues to succeed even though Northwest responded very aggressively, possibly in contravention of the above rules, when Frontier entered the Denver-Minneapolis market in 1995.

So, basically, if other airlines had better business plans, competing with Northwest, American, or whichever other airline you can name, would not have put any of the carriers out of business. The incumbent carriers may have contributed to poor yields on certain routes and acted against competition laws in so doing, but other airlines survived it.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently offlineTZTriStar500 From United States of America, joined Jan 2004, 1458 posts, RR: 9
Reply 20, posted (4 years 7 months 3 weeks 3 days 2 hours ago) and read 3261 times:

Let me first say that I do not believe that NW put any airline out of business. In a competitive environment, bad management decisions and business plan is what is the culprit. This business is extremely unforgiving, one wrong decision can cost hundreds of millions and the demise of the company.

Quoting NASBWI (Reply 1):
I wouldn't go so far as to say that NW put them out of business. I'd venture to say that ATA did that all on their own. Their expertise was charter services from their inception. Their foray into scheduled services, along with other business decisions, proved to be their undoing. After all, there are a few other carriers still earning revenue from their military contracts. Omni and World come to mind.
Quoting Cubsrule (Reply 11):
Quoting SNCntry32 (Thread starter):
Northwest won military charter business from them, did they not?

If you want to blame someone for the movement of that business, blame FX, who moved it from TZ to NW.
Quoting brilondon (Reply 16):
Quoting SNCntry32 (Thread starter):
ATA- Northwest won military charter business from them, did they not? And cargo bizz too.

This was just what happens in a competiive market which is in a recession at the moment.

The truth here is that FedEx removed TZ from their AMC team in Jan. 2008 effective in Oct. 2008. This was a breach of contract as the the current contract ran through the 2009 allocation. After that occurred which was about 75% of TZ's business, it could not get any bank financing and lasted until April 3 of that year.

NW was and DL still is a part of the FedEx team for pax carriage as was TZ. Since NW did not desire to do most of the regular non-CRAF flying as part of that team, TZ assumed most of that role. It is alleged that NW had decided internally as part of the team that they wished to "take over" the bulk of the flying and thus, pushing TZ out of the role.

Currently there remains an on-going law suit for nearly $400 million against FedEx by the TZ estate for breach of contract and I believe NW and now DL by default is considered a defendant in the case. This will not be resolved though for several more years and I don't think its actually gone to trial yet.

Quoting burnsie28 (Reply 8):
It wasn't until well after that, they tried adding that to try and take passengers back from NW in IND, by then it was far too late and only lasted the time towards the end of their demise. It wasn't offered long enough.
Quoting Cubsrule (Reply 11):
Well after what? They added the program in early 2003.

The program was added in 2003 and almost completely focused on MDW, not IND. In fact, NW didn't even start the IND focus city until late 2004, early 2005. The fact that we even had a FF program or not had minimal impact on our ultimate demise. Too many new aircraft that were too large at exhorbitant lease rates, inconsistent product and focus, and poor route planning had all to do with it.



35 years of American Trans Air/ATA Airlines, 1973-2008. A great little airline that will not be soon forgotten.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Why Did Tower Air Go Out Of Business? posted Sun May 24 2009 11:59:03 by United Airline
Who Put The B757 Out Of Business? posted Tue Aug 10 2004 17:47:37 by Pilotcoex
How Did Continental Get Out Of Bankruptcy posted Mon May 10 2004 10:35:14 by Alitalia7e7
Midway Airlines Is Out Of Business posted Thu Sep 13 2001 00:04:22 by CcrlR
How Many B737s Did UA Have At Peak? posted Thu Oct 29 2009 20:59:51 by United airline
How Many Airlines Still Name Their Planes? posted Mon Sep 14 2009 00:17:06 by TFFIP
How Many Orders Did Boeing And Airbus Get In 2008? posted Mon Dec 15 2008 22:40:33 by United Airline
How Many Airlines Left In Europe In 2-3 Years? posted Thu Dec 4 2008 03:30:42 by Airlittoral
NW Unions Out Of Touch? posted Wed Aug 20 2008 21:12:31 by DL Widget Head
NW Flights Out Of AMS posted Mon Aug 11 2008 02:39:35 by UA933