|Quoting Boeing7E7 (Reply 44):|
If they want to grow, that's AirTran's problem. A merger for the sake of merging with what appears to be complete disregard for what Midwest is and what makes Midwest viable is just plane stupid.
Someone mark the date on the calendar because for once I'm agreeing with Boeing7E7 about something...
Part of what it boils down to is the answer to two questions: (1) Why isn't Southwest in MKE
yet (and similarly, why did NW
's recent minihub at MKE
fail)? and (2) Why is YX
doing reasonably well with a small hub in MCI
, where Southwest is by far the largest carrier? And what it all seems to point to is:
|Quoting Boeing7E7 (Reply 42):|
MKE is low level O&D with premium customers willing to pay which is why an 88 seat premium airline works so well.
(and similarly, Midwest's niche at MCI
is among carriers who are willing to pay a premium for a product with more amenities).
But frankly, when you compare FL
's product to WN
, what is there aside from business class seating for 10% of the plane and XM
Radio? AirTran crams one more row than WN
into its 737-700's and
takes additional room from the coach cabin with increased pitch in business class. If you're among the 90% of FL
's passengers in the coach cabin, WN
's product is better. In most markets where WN
compete with non-stop flying, WN
has better yields and
a higher market share.
I can understand the appeal of a potential FL
-YX combination on paper. There's little duplication in the route networks and they could gain from combining operations in several major markets. Both operate the 717 as the largest constituent of their respective fleets as well. And it is certainly no secret that AirTran has desperately wanted a Midwest hub, what with their attempts to build up service at MDW
. What I think is missing is AirTran's appeal (productwise) to Midwest's core group of passengers -- and without the passenger base, Midwest doesn't hold much value.
If Midwest is taken over by AirTran, the product is almost certainly going to be virtually identical to the current AirTran product. What would AirTran be able to offer in a jetBlue or Southwest decided to go into MKE
in a big way? No Signature Service, no position as the "hometown" airline, and ultimately, far less of a commitment to MKE
as a home base. There is nothing compelling about AirTran's product which would give them any competitive advantage at MCI
If all they want is a bunch of nearly new 717's, the merger makes sense. But the Midwest business as a whole won't be worth very much if the service levels end up being like AirTran.