Midwest Launches Response To SWA Service
By Andrew Compart
Midwest is proclaiming itself unworried about the pending incursion of Southwest into its Milwaukee hometown market this November, in large part because it said it is more focused on business travelers while Southwest is “more oriented toward leisure travel.” But that view may be based on an outdated image of its future Milwaukee rival.
“We don’t believe we are necessarily the target of [Southwest’s] plans,” the airline said in a statement. In Kansas City, for example, Midwest and Southwest complement each other’s services rather than compete because they target different types of travelers, Midwest said.
“For the past 25 years Midwest has competed and succeeded by providing our customers with a strong network of feeder and long-haul markets, at competitive fares, with excellent, award-winning customer service from our dedicated employees,” Midwest added. “This has not only earned us customer preference and loyalty, it has served to insulate us from competition whose service is aimed primarily at leisure destinations.”
Southwest, however, always carried a fair percentage of business travelers, and has been increasing its efforts to win over those travelers and large corporate customers.
Within the past two years the carrier tripled its corporate sales force, expanded the availability of its product in third-party distribution systems and enhanced its frequent flyer program, which also will get a big makeover later this year.
It also began selling a Business Select fare, in which customers pay more to get to the front of the boarding line, earn extra frequent flyer credit and get a free alcoholic beverage on board, and last fall it also began offering priority security lane access for its business Select and Rapid Reward A-List customers. The push for more business travelers also is one of the main reasons Southwest decided to add service to New York LaGuardia later this year.
Southwest said 20% of its travelers paid full fare in the first quarter, which is an indicator of the level of business travel (albeit an imperfect one because some leisure travelers buy last-minute fares and some business travelers buy discounted fares). And that figure actually has dropped from about 25% because of the recession, which has disproportionately affected business travel.
Whether any of this will matter in Milwaukee is another question, because the impact on Midwest will depend in part on which routes Southwest opts to offer its initial services.
It also will depend on the status of Midwest, which still appears to be struggling financially and also faces growing competition from AirTran, which has increased its operations there by 57% in the past year and just started new service to Denver and St. Louis May 21. Service to Washington National begins June 11.
One of AirTran’s stated reasons for its big push in Milwaukee is that it believes Midwest’s appeal to business travelers is waning with the changes in its fleet and product, in spite of what has been fierce hometown loyalty. Although AirTran is a low-cost carrier, it does offer a business class.
Midwest last fall shifted the majority of its mainline fleet to 76-seat Embraer E170 aircraft operated by Republic Airways as Midwest Connect. That was part of a deal under which Midwest received $25 million in loans from Republic.
Midwest still flies nine Boeing 717 aircraft configured for 99 seats, however, and said it believed it would continue to attract business customers because of its “commitment to service,” convenience and reliability (DAILY, Sept. 8, 2008). Also, Midwest signed an alliance agreement with Delta in March that will include code-sharing, frequent flyer and airport lounge reciprocity, new joint marketing efforts and easier connections with Delta and its Northwest subsidiary at Minneapolis-St. Paul Airport (DAILY, March 11). Delta, by virtue of its acquisition of Northwest, owns 47% of Midwest.
Photo: Joseph Pries
