Southwest Goes Old School, Heads to Milwaukee

You would think that adding service to Minneapolis/St Paul, Boston, and New York/La Guardia would be enough for Southwest this year, but you’d be wrong. At the airline’s annual meeting yesterday, CEO Gary Kelly Southwest Goes to Milwaukeeannounced that Southwest will head to Milwaukee this fall. This is an old school, traditional move for Southwest, though there is a lot of competition awaiting their arrival.

Back before Southwest started flying into the heart of big congested airports, they used to like bracketing cities. Boston, for example, was served by Providence in the south and Manchester in the north. When they first went to Chicago’s Midway airport on the south side of town many years ago, it was just assumed that they would bracket the city by going into Milwaukee on the north some day. It took them long enough, but it’s finally happened.

For Southwest, this gives them access to many of the rich, northern Chicago suburbs that shudder at the thought of heading down traffic-choked roads to Midway. They prefer O’Hare, but Milwaukee isn’t too bad for some of them. North Chicago, for example, is 30 miles from O’Hare but only 45 miles from Milwaukee.

Of course, it’s not just about the northern suburbs of Chicago. There are the lovable cheeseheads in Wisconsin as well, and they must be jumping up and down at this bounty of new air service they’ve been receiving lately. It looked pretty bleak for Milwaukee when Midwest started its death spiral, but AirTran quickly came in and started building it up. Now to have Southwest too? It’s time for a polka party for the locals, but maybe not so much for the airlines. This could be like a mini-Denver situation where you have one legacy and two low cost carriers fighting it out. Only there’s a lot less demand here than in Denver.

I lump Delta, Northwest, and Midwest all into the legacy role held by United in Denver. Midwest is basically irrelevant. It’s a brand name with a couple of airplanes that basically exists as an arm of Delta. So let’s just say that Delta needs to decide what it wants to do in Milwaukee. Is it worth fighting? We’ll see.

But the real action is on the LCC-side of the house. Southwest started stepping on AirTran’s toes in Boston recently, and now this is a full frontal assault. It’s time for war. AirTran already serves most of the likely suspects for Southwest’s first routes (Phoenix, Vegas, Baltimore, Florida, etc). In fact, the only place where AirTran has a real hole that Southwest might like to fill is Texas. Of course, AirTran has limited frequency to most of these places (Phoenix is only seasonal), so Southwest would probably come in with a lot more firepower.

This also doesn’t look like it’s going to be a slow rollout. According to the press release, they will serve “multiple destinations from the airport of choice for business and leisure travelers who work and live across the vibrant and growing region.”

AirTran has to be pissed. They’ve been trying to secure Milwaukee as a good Midwestern base for some time. After their failed attempt to buy Midwest (Midwest’s loss, AirTran’s gain), they’ve been slowly building up their own operation as Midwest shrinks. Do they really plan to fight? Just after Southwest’s announcement, they thought it would be a good idea to remind people that they’re growing rapidly at the airport. And then this morning, they put out ANOTHER release about some Milwaukee flights that are launching. It’s on like Donkey Kong.

Meanwhile, this has to be the happiest group of airport folks on earth right now. Getting Southwest is a big win for Milwaukee which has tried to roll out the barrel for the airline for many, many years. To have both Southwest and AirTran fighting for supremacy is music to their ears. I imagine they’ve cracked open the champagne (of beers, naturally) to celebrate this one.

It’s good to see Southwest return to their roots a little bit here, but it’s not going to be easy. They’re trying to use some old-fashioned market stimulation in a mid-size city with a large metro catchment area to spark some growth. Only problem is that AirTran is there waiting for them, and they’ve got a lower cost structure.

I must admit I was initially really surprised to see Southwest open four cities this year alone, but I understand why they’ve done it. By adding cities, they can cut capacity elsewhere in the system without having to lay people off. In the past, Southwest could always grow themselves out of a jam, but now it takes a little more creativity. We’ll see how this fight goes.

[Original photo from Philgarlic via Flickr]


23 Responses to Southwest Goes Old School, Heads to Milwaukee

  1. The Traveling Optimist says:

    As far as a bracketing strategy, one wonders why they have never considered Colorado Springs, barely an hour south of Denver with a fairly well-to-do population of its own.

    I’m sure they’d love at least one flight a day to LAX, LAS, MDW, MCO and the ever popular 1-stop in ABQ to get to DAL and MSY.

  2. JM says:

    Ah, the Brewers’ wiener race!

    Love the graphic. . . although I do think the frankfurter with the Midwest placard actually more closely resembles Herb Kelleher than “sunglasses dog” does, though.

  3. A question about Midwest as the wikipedia article is unclear. Are they getting rid of all the 717s and just outsourcing all operations to Republic and Skywest?

    If this is the case why doesn’t Delta and TPG just put a end to this and buy “Midwest” and have Republic and Skywest just operate this as Delta Connection?

  4. Shane says:

    I know Southwest doesn’t necessarily want to go to war, but wouldn’t it be interesting if they started with flights to MSP & DTW?

  5. Zach says:

    This little scrap will be fun for industry watchers, I’m sure.

    A quick word about the target audience for this move, though–North Chicago is a suburb of Chicago in the same way that Oxnard is a suburb of L.A. It’s a bit of an outlier and is really on the fringes of what most would consider the Chicagoland metro area.

    Kenilworth, Highland Park, Glencoe, Winnetka, and the other rich northern suburbs are still considerably closer to O’Hare than to Milwaukee, and I just have my doubts that most folks who live in these towns would rather drive 80-90 minutes to MKE (or more, depending on traffic) than spend a few more dollars on a United or American flight out of O’Hare, which is a 20-minute drive from Highland Park on a good traffic day.

    I’m may be completely wrong, but this was my gut reaction.

  6. Err, I know Delta and TPG own Midwest, I intended to say why doesn’t TPG sell to Delta and have Republic and Skywest just operate this as Delta Connection?

  7. CF says:

    Optimist – I’m sure they’ve considered Colorado Springs. Most people thought they’d end up there long before Denver, but now that they’re in Denver, I think Colorado Springs is unlikely. They’re really pouring so much into Denver right now that they probably don’t want to dilute what they’ve got any more.

    JM – Yes, but I thought the Midwest logo was most appropriate on the one that looks like he’s falling down.

    Nicholas – As far as I know, Midwest is still hanging on to its few 717s for now, though there have been rumors that those were going to disappear. I can envision them ending up like Midway (the second one) did when they became a regional for US Airways. Of course, Delta needs more regionals like it needs a hole in its head, so . . .

    Shane – I don’t know about Detroit, but MSP might be interesting. Of course, do they really want to provoke Delta more right away? They’ll already have their hands full with AirTran so maybe they’ll want to delay that headache.

    Zach – Yes, good points. I think the Oxnard analogy is a good one, because both are located on commuter rail so they definitely are tied to the metro area, but they’re far out. North Chicago, however, has a lot going on. For example, I have friends that commute up there every day to Abbot Labs, which has its corporate HQ up there.

    Yes, places like Highland Park, Northbrook, Winnetka, etc are definitely the heart of the northern suburbs, and O’Hare is way more attractive to them. But the northwest suburbs (or exurbs as the case may be), may find Milwaukee even more attractive. I have a good friend who lives in McHenry Illinois and he is indifferent between flying out of Milwaukee or O’Hare even though O’Hare is closer in miles.

  8. Nimitz says:

    Someone cue The Price is Right tuba music for Midwest now.

  9. Steve says:

    I think the deal has already been made. The rest of Midwest’s 717s are going to Mexicana in September.

  10. http://www.airportbusiness.com/online/article.jsp?siteSection=1&id=25619 has the rumors of the Midwset 717s going away.

    I found this quote quite interesting “37% of the combined seating capacity of Midwest Airlines and Midwest Connect.” What other airline has less seating capacity than their regional operation?

  11. Jay says:

    “Someone cue The Price is Right tuba music for Midwest now.”

    Don’t forget the dying horns at the end…..the sound of sad CRJ engines spooling down…..

  12. Jordan says:

    Well I was beat to the punch!

    Colorado Springs would be an excellent airport for them! They’d grab ALL of the local COS population. 700,000 plus. And alot of the southern CO cities.

    WestPac had numerous flights out of this airport in the 90s. Just a poorly run airline. So the numbers are there!.

    COS – TX, FL, CA, AZ, NV, KS would kill for starters

  13. james says:

    Colorado Springs isn’t as appealing as it sounds- geographically speaking anyway. I took advantage of it often in the mid 90s when WestPac was in full swing and DEN was still fortressed by UAL.

    COS is on the southern side of the city, and I-25 through Colorado Springs is constantly congested. For a person living in south Denver it requires a trip over a small pass, (at times inclement weather,) winding through downtown, then through several miles of surface streets before finally reaching the airport.

    Most of Colo Springs better to do folks live on the north side of town, and the population south of downtown Colo Springs is sparse. Even though Douglas County /Castle Rock population might be equal distance from DEN / COS most would choose an easy freeway or toll road drive right into DEN.

    If Southwest were to serve a second front range city I would see them going into FNL (Fort Collins / Loveland,) where Allegiant already flies. While the airport would need upgrades, the population is heavier, and there’s less geographical constraints for a Denver resident to shoot straight up I-25 to Loveland, rather than east to DEN.

    I live downtown Denver and haven’t considered COS an alternate airport since WestPac left, (and I had lots of free time back then.)

    I think the lack of heavy draw from Denver is part of what made them fail.

  14. PF says:

    Who votes for ATL as the next new SWA city? Not Air Tran. . .

  15. Nimitz says:

    @Jay
    Exactly!

  16. Mark says:

    Southwest in Fort Collins. God, do I dare to dream?

  17. I would love to hear Cranky’s prediction on Southwest going to ATL. When will the largest domestic airline server the busiest airport in the world? Atlanta has more traffic in an hour than MKE sees all day!

  18. CF says:

    Jason – I stopped guessing Southwest’s next cities long ago after I kept being so far off it wasn’t funny. But Atlanta fits the profile of a LaGuardia-style market. It’s one of the most important business cities in the country and Southwest can’t get their loyal customers there today. So you’d think they’d at least want to create a connection into their system from Atlanta . . . and maybe more.

  19. PF says:

    “…and maybe more”. Please tell the rest of the story -

  20. CF says:

    PF – I didn’t mean to imply that I knew anything. I’m just saying that they would least want to make a connection into their system and possibly make it into a larger station than that. Sorry – didn’t mean to be so dramatic with the elipsis.

  21. PF says:

    I understand, just fishing here . . .and thanks for the great website.

  22. RobG7aChattTN says:

    Just to add a bit to the Colorado Springs comments…Southwest has owned gates in Colorado Springs since they aquired Morris. So, they’ve had gates there for a long time, but haven’t chosen to fly there. Still, they haven’t sold the gates either…

  23. Pingback: Frontier and Other Airlines Stand to Gain From the Southwest/AirTran Deal - >> The Cranky Flier

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