Don’t be the least bit surprised if the new Midwest Express intends to be much more like the new Skyway. Midwest Express made money for dozens of consecutive quarters when the only other airline with a similar streak was Southwest. Their tight focus on serving business travelers is what got them the high yields necessary to overcome the high costs of the premium product. They:
--Offered a consistent business-timed schedule
--Served markets with a significant, poorly-served business traffic segment
--Charged fares identical to (not higher than) the business fares of competitors
--Carried a high percentage of local point-to-point traffic, and what connections they did serve were mostly from high-fare feeder markets.
The higher yield came from carrying a higher proportion of business travelers who paid top fares and fewer discounts and junky connections, not from being able to charge more than the competition. They were never able to push much of a fare advantage based on the premium product. They didn’t generally have to match lowball connecting fares, but if American’s nonstops to Dallas were $279 one way Midwest couldn’t charge $289 without seeing erosion. The seating and service sometimes helped people choose Midwest over American when fares were identical, but more than that was Midwest reliably had nonstops ideally timed for business where for years American was off and on, Midwest had the best frequent flyer program if you were in Milwaukee. When Skyway came along some observers felt it would ruin Midwest Express because the Beech 1900 was decidedly not a premium experience. Not only did they do well but in “mixed” markets like Cleveland and Columbus there was no booking away from the prop. If it went at the time they wanted to go they were happily paying the same fare as the big leather seats and shrimp cocktail snack a few hours earlier or later.
Fast forward to Milwaukee in 2019.
None of the big business markets are so underserved that the new Midwest Express would have a significant advantage.
New York, Newark, Washington, Boston, Philadelphia, Atlanta, Denver, Dallas all have nonstop flights, and in each market somebody offers flights at business-friendly times. To be sure some markets could benefit from competition or bigger aircraft or an added frequency, but Midwest won’t make a cent trying to fill that role. The west coast markets are a tough nut to crack because high-fare business traffic is a much lower proportion and the distance makes it harder to serve. The old Midwest never made money to LAX/SFO in premium seating even in the best days...they said exactly that.
Where Milwaukee may have room for the new Midwest are routes which Skyway used to serve. Places like Columbus, Omaha, Pittsburgh, Cincinnati, Indianapolis and perhaps a few others. In markets like these Midwest Express would be the only carrier. These markets still garner comparably high business fares but because there are only connecting flights now many passengers have switched to the highway or drive to O’Hare for nonstops. Consistent business-timed nonstops would give Midwest Express an advantage in pulling traffic away from connecting competitors, the highway or the drive to O’Hare.
Likely the biggest challenge will be to get enough people back into the habit of flying for business travel in markets like these. In the years since there was nonstop service in these city pairs business travelers have gotten into the habit of driving, flying out of O’Hare, putting up with a connection, or phoning more and visiting less. But there's potential well beyond the size of these markets today. Some here will undoubtedly pull out the quarterly DoT stats and say “there are only N passengers per day between Milwaukee and XXX” and that’s not enough. A couple of issues with that:
1. Those stats do not reflect passengers lost to the highway, O’Hare or the phone.
2. Nonstop flights tend to stimulate demand in a number of ways.
3. If you go backwards in the DoT stats into the years when there was nonstop service those numbers were often incomplete. Far enough back and Skyway didn’t report. Then later Chautauqua didn’t report in the years they operated YX* and later F9*.
4. The per-day average stats are the weekly passengers spread over 7 days, but in short-ish business markets there’s very little demand on Saturday and Sunday morning. A market reporting 55 daily passengers might be more like 70 on the average weekday, 30 on Sunday and 5 on Saturday. Midwest probably won't fly on Saturdays or Sunday mornings in these markets.
So I don’t think one can write off these markets as obviously too small to support RJ service. And yes, most likely it would need to be RJ’s, but for a nonstop flight an RJ is more than acceptable.
There’s one additional aspect making many of these routes especially well suited to regional flying. Driving is always a big competitor to regional flying. Most of these best MKE routes are to the east/southeast, and Lake Michigan blocks a direct drive and forces people to drive the length of Chicagoland and Chicago traffic. Here's an example of how impactful that is. MKE-CMH and JAX-MIA are about 330 miles. The drive from Jacksonville to Miami is about 5.5 hours but Milwaukee-Columbus is about 7.5 hours. The circuitous routing and need to fight Chicago makes people more eager to fly to Columbus than you'd expce on a typical 330-mile hop. It’s the same with PIT, with IND, with CVG, etc.
One could reasonably ask if there’s money to be made why hasn’t somebody like Delta put an RJ in a market like MKE-CMH?
--Network-wise it doesn’t really contribute anything to the Delta system.
--Delta already gets a good deal of the MKE-CMH revenue which still flies via MKE-DTW-CMH. So adding MKE-CMH nonstop would dilute a bit from MKE-DTW and DTW-CMH.
--A route like this has very low priority when it comes to determining how to use limited resources.
It’s always possible that if, say, Midwest Express launches MKE-RDU that suddenly Delta sees the light and finally adds MKE-RDU. But for the most part the sorts of city pairs Midwest Express would fly out of Milwaukee are too small for other airlines to bother with and not competitively significant enough to get juiced up over.
Any new airline faces difficult odds, certainly. Midwest Express will be no different. But if they do make it to the air don’t expect them to have the premium service. And unless they totally switch gears and become a big-aircraft ULCC don’t look for Orlando, Vegas or the west coast, either. RJ routes with high-fare business travel is probably their best shot.
Two other quick points....
1. The office space Midwest Express leased from the airport was probably very cheap. It's a smallish decades-old building in the former 440th air refueling base complex.
2. OneJet was an airline concept shockingly disconnected from accountability and economic reality.. At least that's how it clearly appears in hingsight, and like any Ponzi scheme it could only last so long. They were incredibly effective at selling the vision and getting people to invest. But it was all about robbing Peter to pay Paul, as the saying goes. Several Milwaukee-area businesspeople invested in OneJet including former Midwest Express founder Tim Hoeksema who was picked to join in an advisory role. The OneJet way of doing business was long established by that point and I suspect when he recognized what was going on he didn't stick around long. I believe he's one of the Milwaukee investors with claim against OneJet, though likely nobody will see a cent. What's especially unfortunate about OneJet is that it hurts the credibility of potential operators who focus on point-to-point regional flying. That Ultimate survives and makes money year after year shows how it can be done if the situation is right.