YXNet

TMJ4 had an article based on this thread

http://www.todaystmj4.com/news/local/139157939.html

Jay Sorenson says:

"What we're watching now is the slow death of the airline,"... "Milwaukeeans have enjoyed a tremendous benefit -- a competitive outcome -- of very low fares and lots of flights. That's not going to stay."

Any thoughts on this?

WIRunner

okay, who's the lurker?

http://www.todaystmj4.com/news/local/139157939.html

knope2001

We knew that it was pretty much inevitable that something would give in Milwaukee, but that knowledge doesn't really soften the blow much.

The shakeout obviously costs a lot of local jobs. It also means a much worse situation for Milwaukee business travelers. When looking at the shakeout overall (not specificlaly just this weekend's cuts):

--30 nonstop MKE destinations served in the past few years are gone or on the block.

--More driving to destinations under 6 hours.

--More connections and less ability to do business day trips.

--Far fewer destinations served with aircraft with premium seating available.

--Countless millions of banked Frontier frequent flyer miles in the community are far less useful, and potentially soon only useful to the west.

--Thousands of Frontier credit cards in the community which likely no longer justify keeping / paying an annual fee on, but a credit score hit for closing out a long-term credit card.

--Much more difficult to concentrate miles on a single carrier, and to earn elite status. (And for many people in MKE, too many important markets on Southwest have infrequent and/or highly-circuitous schedules like MKE-BWI-CLE to be useful.)


So for many of us in the MKE business travel trenches, the shakeout means a lot more driving, a lot more connections, a lot of banked miles with far less utility, a credit card of questionable value, and few prospects of ever earning elite FF benefits again.


I don't post this to find fault with Frontier or their recent actions. They are in the business to make money, and what they are doing is what they believe is in their best financial interest. Now there's plenty which can be said about how they handled things all along, plenty of "what if's" (both internal and external), etc. But that can be for a different post. (I'm already getting daggers shot across the room at me that I'm wasting a beautful Sunda morning online!)


As for what Southwest will do here in Milwaukee, well, I'm not going to hold my breath. Clearly they will have some benefit from Frontier's decisions. And even my worst-case-but-fairly-plausible scenarios have Southwest at around 20 daily flights here.

But I have several reasons why I don't think Southwest will be the white knight here.

(1) There's no certainty that Frontier pullbacks with make Milwaukee so much more profitable that Southwest will keep everything FL/WN has. As an example, if you go back a couple of years, Indianapolis had AirTran, Southwest, and Northwest/Delta all beating each other up on flights west. Now Indy has no nonstop flights to the west coast at all, a Southwest monopoly (not even WN + FL but just WN) to Vegas, and WN and US to Phoenix. When there's active competition, there's often a strong resistance to "blinking first" for fear it will strengthen your competitor. We may see that happen here.

(2) The smallest plane the dominant airline files here is 117 seats now, which will likely go up with slimline seats. With serious question marks over the 717's role with Southwest beyond a few more years, Southwest's smallest plane might soon be 143-seat 737's. That's simply too much aircraft for many Milwaukee markets without a lot of hub flow.

(3) That Southwest / AirTran has not pulled more assets (including slots) out of Milwaukee is not...at this point...a vote of confidence for the east-west hub. At this point it seems increasingly clear (and not just to me) that Southwest wasn't prepared to integrate AirTran and is still figuring it out. Leaving AirTran intact for now...including bag and seat fees which appear critical to making a buck in their network...is not going to continue forever.

(4) The notion that Milwaukee has an important role to play in relieving Midway congestion is not likely to save the day. The success of so-called "reliever hubs" to take pressure off of congested airports is about as good as "airline within an airline" launches. Airlines keep coming back to the well on the idea of using a secondary hub as a relief for a different crowded one, and it always ends up being pulled.

(5) The DCA and LGA slots are critical for the success of east-west Milwaukee, and when Southwest finally is able to do more than just let AirTran function as-is, it still does not seem logcal that Milwaukee will retain most of their access east. Currently from LGA there are 5x to Milwaukee and 5x to Midway, among Southwest's biggest markets. Currently from DCA there are 4x to Milwaukee and 0x to Midway. How long will that last? And for those who say that Midway is just too crowded to add DCA and more LGA, note that they are making room to add two Akron flights later this summer. LGA-MKE and DCA-MKE are not financial disasters to deal with now like CAK-MKE is. But when Southwest actually starts to integrate AirTran, does anyone think they will say the best use of LGA and DCA assets are to Milwaukee? That dosn't necessarily mean zero Milwaukee flights to the east, but it might well mean enough cuts to make Milwaukee east-west not work. East coast assets might be even less profitable for Southwest to use on Milwaukee if US, DL or someone else fills some Frontier vacuum here.

Of course we'll see what happens. But I have a feeling we're going to look a lot more like Columbus, Louisville, and Indianapolis soon.

knope2001

LOL....not me. I'm glad they didn't mention DEN-RFD because that market is *not* being dropped. It was either my error when looking at the online schedule, or it may have been incorrectly listed as unavailable all seven days of the week I checked.

What is also being dropped is DEN-TUS. Word is that it's planned to return seasonally.

MikeFromMKE

Pretty soon they'll be quoting Knope instead of Jay Sorenson!

Anyway excellant analysis as usual Knope. You pretty much hit the nail on the head about MKE's future. They've enjoyed several years of a lot of service only to end up with probably not a whole lot. As someone who is about to move back to MKE and possibly starting a small business, it is scary to think of the local businesses that have benefitted from good air service for so long. Sure you'll be able to connect in places like ORD, MSP, and DTW, but it is far less convienient.

I also share your thoughts on elite status, and much more enjoyed being a big fish in a little pond vs a small fish in a big pond. I'm trying to figure out how much I want to connect in DEN next year. My travel patterns probably make AA a good choice but I've never been impressed with their product.

As for the credit card, I'm glad I didn't join yet. But closing it doesn't necessarily hurt your credit except for the fact that your amount of available credit goes down. The "age" of a card on the report is always reported based on when you opened it, and even after you close the card it continues to "age."

http://www.bankrate.com/financing/cr...-credit-score/

tvnwz

I imagine the media watches this forum..and the other enthusiast site...like hawks. If not, they are missing a perfect place to pick up stories. Knope is as good as any inside source, if you ask me.

Knope, maybe you should send them a stringer bill!

knope2001

Re-reading my post on my smart phone at a stoplight, I want to make this a tad clearer. Worst case I see WN around 20/day, but that might turn out to be 30 or 40 or even more. But even in the best case I just don't see Southwest getting us markets like Raleigh, San Diego, Hartford, Indianapolis...much less Grand Rapids, Des Moines, Dayton, etc. (DSM will not last beyond FL.)

Dick Ginkowski

I would not call this a slow death of Frontier at MKE but rather the funeral dirge.

BlueHorseShoe2000

We know that most of the routes listed above are on borrowed time. Once ZW can get MSP-RHI up and running, Frontier will end service. The sub 99 seat aircarft are not part of Frontier's year-end fleet plan so IND, CMH, BNA, and OMA are goners too. MCO will probably be cut in September (I'm surprised they're even keeping it this summer with AirTran going up to 4x daily). With only 1x daily to DCA, yields will be garbage and Frontier will pull the route if they can find a better use for the slots. I suspect Southwest and Delta will try to force Frontier off of the LGA route. That leaves DEN.

knope2001

Here's an updated list of departures at MKE. Including the new PIT addition, Milwaukee will be at 20 flights to 10 nonstop destinations:


0600 DEN
0714 LGA
0715 MCO
0720 IND
0835 BNA
0840 OMA
0901 DEN
1025 PIT
1235 CMH
1247 RHI
1425 DEN
1425 OMA
1430 DCA
1520 BNA
1551 LGA
1605 IND
1850 PIT
1859 DEN
1915 RHI
1925 CMH

Dick Ginkowski

If DL is awake it would be all over these cuts like flies at a picnic. The old NW would have,

newsmanhoss

Journal Sentinel reports 500 Milwaukee employees will be cut:

http://www.jsonline.com/business/fro...139239153.html

mke9499

And...the other shoe has dropped.

I think that the MKE maintenance facility is gone.

http://www.bizjournals.com/milwaukee...ukee-jobs.html

It will be interesting to see the $ deal made with DEN to bring the jobs there.

knope2001

As bad as they are, I'm surprised it's not a bigger chunk of the local workforce.

The crew bases are being closed, which means all 230 MKE-based crews are displaced. That leaves 216 non-fligh-crew position cuts.

If there are about 1,000 (pre-layoff) MKE-based employees, that means there are about 770 non-flight-crew positions.

216 non-flight-crew position layoffs
770 non-flight-crew positions in MKE before layoffs

Thats only about 28% reduction in workforce among non-flight-crew ranks.

Of course only is a very relative term. But I thought it would be even worse. I wonder how many of the remaining positions are in direct support of the MKE station operations (ramp, groomers, gate agents, etc) and how many are in res or in the mx area which support the airline as a whole.

As far as the initial media reports, I have to chuckle that the Journal Sentinel rounds 446 up to 500 in the headline (not even "nearly" 500). Coverage of Frontier has been more even handed since Tom Daykin is off the airline beat, but this particular story was written by....Tom Dakyin himself. At least both JSonline and the Business Journal acknowledge that the flight crews are being transfered and in many cases do not reside in the area. That must have been clearly specified in the press item

IllinoisMan

Thank you, Tim Hoeksema! The seeds you sowed have finally germinated and flowered. It was Hoeksema who engineered the sale of YX to NW and a group of loan sharks from Texas. NW ponied up for the sole purpose of keeping the airline away from FL. Remember that NW almost immediately called its "investment" a total loss for tax purposes, and the financiers peddled the carcass to Frontier/Republic. Had Hoeksema been able to keep his considerable ego in check and sold the airline to FL, they would have used Milwaukee as its midwest hub and likely would not have sold out to WN. Not to mention Brian Bedford wanted nothing to do with YX in the first place, he wanted everyone of their employees out. He is a terrible CEO - destroying TWO respected airlines! Bedford pays his employees so low, the majority could qualify for the food assistance program. Flying Republic Airlines is supporting the cancer of the airline industry! Maybe the animal on the tail should be a weasel!