|Quoting TVNWZ (Reply 68):|
Because for many, many, many years NW and North Central/Republic were the dominant carriers at MKE. That loyalty is still there today. In fact, the whole concourse where NW is located was built expressly for North Central.
But, let's face it. If FL comes in with cheap fares to many cities, they will get the loyalty.
Milwaukee is a little diffrent in many places because it has high loyalty to the main carrier here (Midwest) but also high loyalty to Northwest, a definite also-ran. It is not simply a matter of the old North Central days, either. Large, large numbers of Midwest Executive Level frequent flyers are also Northwest Silver Elite or higher here. Why would this be? Because there are many destinations, including everything international besides YYZ
, that Midwest doesn't serve. For many travelers here they use Midwest if it is available, but NW
is their fall back carrier if Midwest doesn't go there.
That's a key reason Norhtwest keeps trying here to set up a focus city and keeps pulling out. The pool of NW
elite frequent flyers here is unrivaled for a city our size (outside the hubs), but they largely take Midwest if they can. (One of those "when you run the numbers" situations that says NW
should clean up here.
So won't AirTran then be the carrier of choice, and NW
be the fall-back carrier? Well, there are a number of reasons why I suspect that won't happen as much as they'd hope
(1) Frequent Flyer Program
AirTran's frequent flyer program is viewed as inferior -- even uncompetitive -- by many because of aggressive expirations and comparatively few partners, earnings options and rewards options.
(2) Lack of International Options
For travelers with even occasional trips overseas, the ability to roll those 12,000-20,000 miles per trip into the same pot as my domestic earnings is huge. With program links that has been possible for years with Midwest. Not with AirTran, and it will discourage those travelers from seeking out AirTran at MKE
for their frequent domestic travel.
(3) Corporate Travel Agreements
This is not AirTran's forte, and even if they do try to keep Midwest's deals, you can bet the comptition will come in aggressively sensing an opportunity. I found it a little amusing that AirTran boasted of having what, six corporate sales offices? If iI recall correctly Midwest (a much smaller airline, as they like to point out) has several more than that. Midwest's corporate sales department was ranked #1, #2 or #3 across the board in a survey of corporate travel department heads last year. And that's of all domestic airlines large and small. So what does this corporate travel agreement issue really amount to? Well, just to use my own company (a fortune 500 company) as an example, our corporate travel plan directs us to book with a "preferred" carrier for domestic trips even if the fare is as much as $200 higher than a non-preferred competitor. Midwest is on the preferred list, and AirTran is not. If AirTran does not maintain that preferred status with my company, our traveling employees couldn't be loyal to AirTran no matter how much they might want to.
(4) Likelihood of Fewer Regional Destinations
While AirTran's initial promise was that no destinations would be dropped, in the latest presentation it looks like Escanaba, Marquette, Austin, Colorado Springs, Ironwood, Marquette, Iron Mountain and Muskegon are missing. But beyond that, there's a very reasonable doubt that AirTran will find a way to profitably serve places like Louisville , Rhinelander and Grand Rapids from MIlwaukee. RJ
's don't work with the low-fare business model, and the maybe-promised 70-90 seat RJ
's (whose ecomics with low-fares are unproven) are just too large to serve many of these markets. Sure, AirTran is pledging to add other destinations, and some of them might even have a chance to succeed (a different point to debate). However markets like MKE
are primarily leisure travel. Markets like MKE
are primarily business travel because leisure travelers largely drive. Serving MKE
is not nearly as useful for the average high-frequency business traveler as MKE
. And the fewer nonstop destinations useful for frequent business travelers, the lower the loyalty.
(5) Likelihood of Increase Competitive Incursions
While a lot of the hand-wringing over what MKE
will look like (be it YX
) when Southwest or JetBlue comes to town, this isn't necessary for a post-merger AirTran to feel serious heat in Milwaukee. A key arguement of AirTran up until a couple months ago was that a re-energized NW
was sure to come back to Milwaukee to restablish a focus city, likely using passenger-friendly 76-seat CR9s and E170s. Well, when NW
partnered up, that arguement evaporated. But if AirTran wins MKE
, now that aurguement comes back into play in a bigger way. Milwaukee will almost certainly be viewed as "in play", and we're likely to see someone like NW
come in with more point-to-point flying. AirTran's quick retreat on IAD
when JetBlue and Southwest annouced they were entering, has (among other routes) earned AirTran a reputation as an entitty that "blinks". MKE
will be seen as "in play", and the more nonstop competitors AirTran has here, the harder it will be to keep Midwest's lingering loyalty.
I think that it's dangerous to count on Midwest's loyalty to transfer over to AirTran. Low fares will buy you only so much loyalty, especially among those frequent travelers for whom fare is not the only factor.