BlueHorseShoe2000

I don't disagree with you that the pricing actions Northwest took had a big effect on the financial performance of the flights. However, it wasn't just the fare levels that killed the route. Midwest wasn't getting the enough passengers, either.

Yes, traffic increased for Midwest after service commenced. But the load factor for the first month was only in the 50% range and climbed during the summer months, then dropped dramatically as the end of summer neared. Even if Northwest did not cut fares, it appears as if DLH was going to be a struggle for Midwest over the fall and winter.

Here's an excerpt from an article on Midwest ending DLH service:

Midwest’s Smith blamed disappointing passenger traffic for the decision, which is at odds with signals the carrier was sending to its new airport host as late as September.

“We were unable to get the economic return we wanted,” he said.

The airline had predicted Duluth/Superior would be a strong market and business indeed got off to “a good start,” Smith said. City officials and such business groups as the Area Partnership for Economic Expansion were receptive and helpful, he said.

Despite extensive marketing, traffic did not meet forecasts, and advance reservations did not portend a successful winter season, he said.

Between past performance and forward-looking studies, “the combination didn’t show a trend of improvement,” he said. “People are making other travel choices.”
Nevertheless, airport manager Ryks was ambushed by the decision.

He said one Midwest executive told him in September its Milwaukee-Duluth/Superior operation was one of the top five performers for the carrier’s Midwest Connect regional service.

Midwest’s Duluth/Superior passenger traffic rose steadily until September when it dropped sharply. Ryks said the decrease resulted from Midwest’s decision to reduce its service from three to two daily flights to balance service with seasonal traffic. Midwest executives told him the third flight would return in the spring.

In early October, Midwest rearranged its two flights, eliminating an arrival at 11 p.m. that departed for Milwaukee at 5:45 a.m. Ryks termed that restructuring “a bad move” given that business travelers preferred the early flight to get to the east coast by noon and a return in late evening.

Sixel agrees canceling the “R.O.N.” (remaining overnight) flight was “the final coffin nail.” Bu he added, “I don’t think Midwest went out of its way to sabotage” the Duluth/Superior market. He said it’s common for airlines to shift equipment to other routes that promise greater profits.

Midwest’s Smith said the flight was dropped because “it didn’t perform. It was a great flight in terms of timing but it didn’t get enough people,” he said.

Global_Hi_Flyer

The DL decision to enter talks with NW (making the assumption that DL's BOD signs off) will impact anything NW tries to do with YX, and make it more likely that DOJ will object. If DL links up with UA, on the other hand, then it would make a ton of sense for NW and YX to join.

Of the two, I think DL/NW makes more sense in a lot of ways (starting with their existing Skyteam relationship), and given that both are smaller than UA, it's probably easier to get done. I'd guess that would push CO in the direction of UA or AA, with the other one looking at US.

Just my opinion.....

YX802

If the acquisition was as important to AirTran as Joe Leonard and Bob Soprano stated, they should have had the capital to back up their offers. They didn't. Each offer was undervalued and subject to financing.

In the end, the cash offer was much more attractive to the Board of Directors, even with three members of the Board bought and paid for by AirTran.

dhuey

The guy was making a pitch in the heat of a takeover battle. In the end, the other party was willing to make a superior offer. I don't understand your focus on integrity, putting up or shutting up, etc. This is just business.

And in retrospect, AirTrans decision to let TPG/NWA "win" looks pretty smart, doesn't it?

hazelrah

It's the same old story, repeated again and again -
1)Midwest showed some cohones and provides new and better service in the markets, 2) Northwest did its thing, 3) return to the old status quo.

Midwest had the cohones and I give them credit, its pockets just weren't as deep as NWs'.

And I don't completely believe the Midwest corporate spin on DLH so we'll just have to agree to disagree.

flyYX

After having some time to think about it, I smell a rat. I have no proof to back it up, so I won't argue one way or the other. I just stated my feeling on DLH before. At this time I don't completely buy the official explination on why DLH failed.

YX802

The only business Joe Leonard and Bob Soprano are in is "monkey business". They are both a couple of snake oil salesmen.

Tim34

What??????????????????

knope2001

Midwest had to bottom-feed fares to fill seats, and that's especially notable in markets with a larger busienss-traffic segement. It stuck with NW.

Average fares from Duluth for the most recent quarter for NW and YX. Also included is average Midwest fare for a different feeder city for comparison.

Duluth-Atlanta
$195.25 NW
$148.00 YX
Madison-Atlanta $198.29 on Midwest

Duluth-Fort Lauderdale
$210.78 NW
$142.16 YX
Appleton-Fort Lauderdale $172.78 on Midwest

Duluth-New York
$221.90 NW
$159.50 YX
Appleton-New York $202.08 on Midwest

Duluth-Orlando
$208.81 NW
$150.68 YX
Green Bay-Orlando $167.37 on Midwest

Duluth-Tampa
$228.70 NW
$148.75 YX
Muskegon-Tampa $147.43 on Midwest

Duluth-Washington
$231.02 NW
$175.55 YX
Green Bay-Washington $170.71 on Midwest

Duluth is a rather high fare market, and that's what has lured AA there multiple times and what lured Midwest there in 2007. But just like AA found, most higher-fare passengers stick with Northwest and leave crummy yields for any newcomer.

DLH-MKE is roughly three times the length of Midwest's traditional feeder routes...about as long as Milwaukee-Columbus. Those kind of fares probably came nowhere close to covering costs.

Tim34

And I could say the same thing about Tim (CEO), that doesn't make it nice or valid either. We should try and keep our comments less personal. While we may not agree on a lot of issues these are business decisions by companies trying to better themselves.

YX802

Who would I have to engage in spirited discussion if not for you?

Tim's record speaks for itself. Leonard bankrupted Eastern airlines many years ago, and Soprano was fired by NWA. It's all on the record.

spampurse

People that sling mud have nothing else to back up their convictions.

YX802

Not mud slinging,those are cold hard facts. do some research. AirTran also has a history of broken promises, just ask the folks at BWI. AirTran has also had numerous discrimination suits filed against them by their own employees. If that's how they treat their employess I wonder how they treat their passengers.

Tim34

These comments are not needed here please post them in the Airtran forum

YX802

Originally Posted by YX802
All the AirTran supporters need to deal with the reality you LOST the hostile takeover attempt. Just suck it up and move forward building a "world class low fare airline" as Joe Leonard planned.