FlyerTalk Forums - View Single Post - More hub gouging at MSP?
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Old Dec 19, 2004 | 10:51 pm
  #4  
Bagels
 
Join Date: Oct 2002
Posts: 2,039
Consider hub premiums:

- Minnesota employs a disproportionate number of NW employees in relative to other legacy airlines presence at their respective hubs. In fact, NW continues to consolidate its satellite workforce into MN: call centers, maintenance (all in-house maintenance is now done at MSP ... only line-maintenance is performed at DTW and MEM) and high-ranking operational personal (the need to contact MSP to handle even what some consider minor situations has long been a major complaint of hub management in DTW and MEM). And ironically, NW’s cost per passenger are significantly higher at MSP than DTW and MEM...

- MSP continues to grow, backboned by NW of course. The airport is the second-largest gateway to ANC (outside AK), the fifth-largest gateway to HNL (trailing only LA-area, SF-area, SEA and ORD) and offers at least five daily transoceanic flights (including 747 service to Tokyo). Despite having about half the O/D traffic to MCO and LAS than DTW (including chartered/scheduled), it will offer more flights & more capacity this winter (including charted/scheduled). MSP is also the third or fourth largest airport (in the USA) in terms of destinations served. Quite an amazing feat if you ask me, especially given the size of the community.

- As illustrated above, NW brings thousands of jobs and a huge amount of air service (attracting business, small-large conventions and millions of cash-spending connection passengers) into MSP.

Also consider compeition:

- NW’s O/D market share is about 60% at MSP (that’s O/D market share - the number that really matters - NOT overall traffic). It’s about the same in DTW, and slightly higher in MEM. AA@DFW, DL@ATL, etc. are much higher numbers. 60% is hardly a monopoly.

- Define competition. DL, for example, has about 70% of the ATL-MCO O/D market share whereas NW has only 55% of MSP-MCO, yet most people will rate the former as more competitive simply because of FL’s vast number of flights. UA operating MSP-SFO would bring competition, but not likely lower fares (maybe to a couple businesses or so).

- Some people characterize a $300 MSP-SFO fare as being “unfair” because it’s only $1 from Chicago. Therefore, people going to/from MSP must be overcharged, right, right? Or maybe it’s because one market is overserved & underpriced...
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