Delta Comes out Swinging at Frontier Over Minneapolis Move

Anyone who thinks that the days of airline schedule retaliation are over clearly hasn’t been watching Delta. The airline is royally pissed that Frontier had the gall to enter the Minneapolis to Kansas City market and now it’s unleashing its own response to try to change the airline’s mind. What a waste of a good airplane.

Delta Fights Frontier in Kansas City

On March 2, Frontier said it would begin two daily flights between its mini-hub in Kansas City and Minneapolis on June 6. Before these flights, Delta was the only one operating that route. It was big enough that there were even some mainline Delta flights out there. So you would expect hard price competition between the two and maybe a little beefing up/tweaking of Delta’s schedule to best position itself against Frontier. But the reaction was far stronger than that.

Delta has quietly added new flights that sit right on top of Frontier coincidentally (yeah right), also beginning on June 6. You will now get two daily flights from Kansas City to Boston, two to Columbus, one to New Orleans, and one from Omaha to Washington/National. Why do I say this is retaliation? Because there’s no other way to look at this.

The only nonstop from Kansas City to Boston, Columbus, and New Orleans right now is on Frontier. Apparently Delta forgot to look at the tapes, however, because the Columbus flight will end on June 3. But these are also the only nonstops from Kansas City on Frontier that have no direct competition except for Austin, Seattle, and the newly-announced San Antonio flight. There’s no way Delta is going to want to waste that much aircraft time to bother with Seattle if it’s just retaliation. And Austin and San Antonio really aren’t Delta’s domain. They can leave that to the Texan airlines.

But possibly the biggest smack is that Omaha to Washington route. That’s one of the legacy Midwest Express (now part of Frontier) routes that has been operated for years. Right now, Frontier flies it twice daily but Delta is coming in to spoil the party.

Though I doubt this is the main catalyst, this move might also be a little kick in the pants for Frontier’s decision to fly to Provo, an alternate for Delta’s big Salt Lake City hub. Never a dull moment in this business.

So what’s the bottom line here? This is an attempt by Delta to convince Frontier not to bother starting Minneapolis. The hope is that if the collateral damage is too much, Frontier will walk away with its tail between its legs (sticking with the Frontier animal theme). But Frontier isn’t likely to budge on this, I wouldn’t think. Instead, both airlines may just suffer losses for awhile as they compete hard against each other. At some point, someone at Delta will realize that it’s a waste of time and pull out.

It always amazes me that airlines continue to try these types of tactics that so rarely seem to succeed. And since it’s nearly impossible to prove anti-competitive behavior, there’s nothing really stopping Delta from doing this other than someone on the inside looking at the balance sheet and saying that it’s a huge waste of money. At a time when fuel is spiking, decisions based on spite instead of actual commercial viability really are a waste.

But hey, there is a silver lining. Cheap fares for Kansas City-folk for awhile! Enjoy it while you can.


44 Responses to Delta Comes out Swinging at Frontier Over Minneapolis Move

  1. DGS says:

    There’s also the small matter that some of these routes Delta (Connection) is opening will be flown by…wait for it….Republic!

    • LOL!!! great point!

    • Ian L says:

      What would be really funny is if a route or two actually used one of the seven E70s that Republic (dba Shuttle America in this case if memory serves) took out of Frontier service. RJET makes a profit off of fixed-fee flying but not so much off of Frontier-branded ops. Which means that competing with themselves might be a slight money-loser, but the real loser here would be Delta :p

      Of course, Delta could theoretically use ASA to staff an MCI route or two but currently that carrier only goes to hubs from MCI, not point to point…

      • Ian L says:

        Okay, spoke too soon. The OMA-DCA flight is operated by Compass with an E75, versus Frontier’s two daily E70s. Right now though the Delta flight is ~$40 cheaper on a one-way. I can’t tell about MCI-MSY but it appears to be a Mesa ERJ-145, to Frontier’s E90.

        MCI-BOS on DL is on a CRJ700 by Comair, where F9 is running an A319 on the route. What’s interesting is that Delta isn’t stepping on Frontier’s schedule here, so you’ve got three flight times per day on the route, plus a quick-turn (34m layover) MKE stop on F9 ($10 more than direct) leaving MCI at 6AM on an E70 and landing at BOS at 11:08 on an E90.

        For MCI-CMH DL’s 2x daily flights appear to be…you guessed it…Mesa E45s, one of which overlaps Frontier’s 1x daily flight (at the same price) on an E90. But, as Cranky mentioned, that flight is gone as of a little less than a week before DL’s flight starts. Though if you want a morning flight Frontier has a connection through MKE (25 minutes!) for 3 hours of travel time at $9.20 more than DL’s flight. In which case you’d be stuck in an E45 for 1:11 instead of 1:45, but would spend 1:21 in an E70 in return (on the way to MKE).

        For reference, MCI-MSP is 6x daily for DL, who flies DC9-50s, MD90s, A319s, A320s, Cr9s and E75s on the route depending on the day and time. So pretty much the exact same aircraft sizes as Frontier flies everywhere. Though at this point Frontier is starting with a morning E70 and an afternoon E90…for $50 per one-way less than Delta, a slightly larger price difference than the one between DL and F9 (in the opposite direction) on OMA-DCA. This is the only case (at least for this announcement set) where Frontier actually flies smaller planes on a route than Delta *shrugs*. Interesting stuff, to be sure.

        NOTE: This was for Wed, 6/8. Aircraft may be different for a different date, but from comparing MCI-MSY flights it doesn’t appear to be.

    • CF says:

      I can’t believe I missed this connection. It’s amazing that Delta is making Republic punch itself in the face. The perils of this new business model, I suppose.

  2. dan powers says:

    the best way delta could fight off frontier is to give codeshare flying from chataqua or shuttle america to other delta connection carriers….basically delta is shooting itself in the foot by paying it’s competitor= Republic to stay in business…(republic is the parent company of chataqua,frontier,shuttle america,midwest, midwest express)…..

  3. Zack Rules says:

    Funny about those routes. Jetblue did the same thing when Airtran added Tampa-San Juan. What can be said, the airline industry remains irrational!

    • at least that was one of the SJU routes that AA was dropping, i believe.

    • CF says:

      I see that as being very different. JetBlue has been building up San Juan-mainland US flying and it saw the opportunity when existing service went away. This wasn’t a fight against AirTran.

  4. JC says:

    This is typical Northwest Airlines behavior, not Delta behavior. So that tells you who is really running Delta nowadays

    • CF says:

      An excellent point. There’s no doubt this is Northwest behavior. They always loved to destroy anyone who tried to cross them.

  5. Dan Webb says:

    I’m not sure about the Provo reaction…it’s a very small amount of capacity, and F9 is already on SLC-DEN. I doub’t Provo would’ve happened had the airport not received a SCASD grant.

  6. Great post and insights, Brett. An interesting move on many levels. But as you said, it is good news (at least for the time being) for the folks in KC. Service there seems to have been a little stagnant of late. I’d also be interested to see what the folks at Southwest have to say about these moves…

    • good point on WN, could definitely see them adding MCI service to MSY and perhaps even BOS or CMH, not to mention DTW or MSP if they really want to take it to DL or even CLE if UACO pulls back on MCI flights.

      • Ian L says:

        Well, WN could move into MCI-DTW where there’s no competition from Frontier, or they could hit one of the cities where Delta is running RJET regional jets and Frontier is running something similar or larger. I wouldn’t guess that MSP is a target though, unless they really wanted to hurt Delta (which has maybe 4x the route capacity of Frontier at this point).

    • CF says:

      I imagine Southwest will just stay out of this. It’s not their fight and Kansas City isn’t a big focus for them anyway these days.

  7. JC above is right, this does sound more like what NW had done in the past. Maybe the local Kansas City people will know DL isn’t in MCI for the long run and will give their business to F9.

    Is there really a need for more OMA-DCA service to use up valuable slots in DCA?

    • i also wonder where that slot is coming from? DL must be pulling back frequency on another DCA destination.

      • CF says:

        Well, remember Delta has a ton of DC slots that it wants to trade with US Airways. So there are plenty of places it can look to reduce a flight or two without having much of an impact.

  8. Brodie says:

    Remember, this behavior is 100% NWA. The original Delta wasn’t like this. NWA is vindictive and nasty tasteless management. Seems like more NWA big heads kept their job after the merger. Too bad. I am rooting for Frontier here. I hope they win big!

  9. Bill says:

    Delta versus Frontier? I’ll take Frontier every time

  10. Clip says:

    some of you might remember the old Eastern days when Eddie Rickenbacker ran the show. If any carrier started some competition he would set a flight 5 minutes before theirs and one 5 minutes after and run that way until the other carrier pulled out. The only way to make a small fortune in the airline business is to start with a big fortune.

  11. Felix says:

    I’m surprised you did not mention UA in SFO ORD adding 5 frequencies the day VX started. That is a big retaliatory move.

    • CF says:

      That’s not a surprising move at all, and Virgin America absolutely shouldn’t be surprised. If there’s an entry into a market where you have a big presence, you would expect the existing airlines to shore up their flights and compete head-on. Had Delta simply increased frequencies in Minneapolis-Kansas City, then it wouldn’t have been worth writing about.

  12. Just a thought; I only wish that DELTA would apply the same instant response, resources and attention to improving their Frequent Flyer program and Customer Service. It would only improve travler loyalty, public relations and in the end, benefit the bottom line.

    In the mean while DELTA continues to reflect it’s stereotype image of a blundering giant……

  13. Daniel says:

    Did anyone take notice that the MCI-CMH/MSY flights are on Chautauqua Airlines, who is owned by Republic, who also owns Frontier. It might be a direct attack on Republic’s business model.

  14. nz mariner says:

    Part of the problem here is that this NWA-style retaliation has worked against Frontier in the past.

    When (previous) Frontier started its LAX focus city, with LAX-MSP as a critical route, NWA went nuclear. Not only did they beef up LAX-MSP they also added 3 x daily DEN-LAX, a seminal Frontier route.

    LAX-MSP lasted all of three months before Frontier pulled it and NWA immediately ceased DEN-LAX.

    I never understood why Frontier was ready to do battle with NWA again with MEM, but they did and NWA predictably responded, although not quite as ferociously. But Airtran did, by adding MEM-MCO. So MEM didn’t last.

    Frontier’s only response – so far – to this present hoo-haa is to up-gauge MCI-BOS from the E190 to the A319, which gives them some cost advantage on the route. But it has been suggested that Frontier’s old Nemesis, Massport, has been angling for another carrier on BOS-MCI for some time, which suggests that perhaps Frontier’s relationship with Massport has never recovered from what happened after 9/11.

    I hope Frontier stands the ground. At less than 400 miles, MSP is one of the closest big cities to MCI and it seems particularly sophomoric of Delta to say that Frontier can’t serve the route.

    But I assume that OMA-DCA is a clear shot across Frontier’s bows – that the airline should not even consider starting OMA-MSP.

    • CF says:

      I think this is different than the previous build-ups to some extent. The LAX and Memphis moves were clear moves on markets that weren’t Frontier strongholds at all. It was an expansion attempt and Northwest knew that it could get them out of there quickly. (Not saying it’s fair, but just different.) In this case, Kansas City is a Frontier hublet, so adding cities with strong demand makes sense for the airline. It also means that it should be able to withstand a Delta assault here better because it already has a base.

      • nz mariner says:

        I think it is different, too, but only in style, not in content, and similarly ruthless.

        Delta has discovered that Frontier had already decided to drop MCI-CMH, thus nullifying part of the effect, and they have added another new route – MCI-AUS.

        • CF says:

          I agree. The only difference is that I think Frontier can better sustain the hit in a market like this because it already has that built-in base of customers.

  15. Ian L says:

    Hmm, DTW…DL is charging $300 R/T there and has enough traffic to merit 2x mainline and 2x 70-passenger jets, one of which is run by Shuttle America (RJET). Even funnier, the $300 flight is on the Shuttle plane…everything else is $100 per R/T more expensive. If there’s enough destination traffic (there may not be) Frontier could push a flight or two that way similar to what they’ve done in MSP. While we’re being vindictive and spiteful and all that…

  16. “since it’s nearly impossible to prove anti-competitive behavior” Why? What reasonable rationale could Delta put forth on this that it isn’t anti-competitive?

    • CF says:

      How do you prove it is anti-competitive? Airlines are allowed to try any routes they want, and Delta can say they saw an opportunity and jumped on it. The only way you can prove it isn’t is if you can show that the airline is operating below its costs, but airlines have a way of being able to manipulate numbers thanks to the complexity of revenue recognition in this business. A challenge to these things almost never wins.

      • Jim says:

        Forgive my naivety, but why is it so difficult to show that the airline is operating below its costs? Everyone knows how much it costs to run a plane (I have seen tables of revenue per seat-mile for each airline) and the fare data is public as well. What is the problem?

        • CF says:

          There are a lot of tricks here.

          On the cost side, airlines could say that there’s no reason to include full allocated costs like administration, etc because that has to be paid no matter what. Since this is an incremental flight, only the incremental cost is counted.

          On the revenue side, there are a bunch of ways to look at it. For example, Delta could connect Omaha customers in Washington to other Delta flights. How do they decide to allocate that revenue? If they really wanted to, they could make some excuse saying that those passengers are only flying Delta because of the flight from Omaha to DC and allocate all the revenue to that leg.

          But the revenue one is a little weaker – it’s the cost allocation that’s the killer.

  17. Silly! Maybe I should say stupid. Whatever happened to the idea of capacity discipline?

  18. oldesfan6479 says:

    This week, an Atlanta sports talk radio station reporter tweeted about a bad experience he had on a recent DL flight…DL corporate leaned on station management…said reporter was canned. ATL JC newspaper story:

    http://blogs.ajc.com/radio-tv-talk/2011/03/15/680the-fans-chadd-scott-said-he-was-fired-for-tweets-about-delta-airlines/

  19. The yield (under Northwest/Delta) from MCI to MSP is over 50 cents a mile–one of the highest in the industry. Looks like classic effort to maintain a monopoly position by driving new entry from the market.

  20. Robert S says:

    Looks like Northwest, er, Delta thinks Frontier more malleable than Southwest. Southwest added MSP-STL a couple years ago and DL retaliated with… nothing. Guess they figure SWA is more likely to dig in and fight any retaliation for the duration.

  21. Sara says:

    Late to this party, but the Frontier deal would have been better if they could get into the new terminal where Southwest is at. Far easier of a terminal to manipulate than Delta/Northwest’s older terminal across the field (and the place they were bullying for after the remodel was complete). Half the reason right there for me switching more to Southwest. Great staff in that place.

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