American Asks to Defer Beijing Flights
It wasn’t long ago that airlines were climbing on top of each other to grab slots to China. Now the DOT can’t even get airlines to start the flights they’ve earned.

The Problem with the $150 Change Fee
Now that airlines are going to a $150 change fee, they’re actually going to leave money on the table. Something needs to “change” . . .

Midwest Receives $60 Million to Restructure
Midwest has restructured once again, and the airline now appears to be on its way to a regional model. Republic has to be pretty happy right now.

United, Northwest See Steep Decline in Pacific Traffic
This summer has seen a pretty steep drop in the number of people flying from the US to Asia. This probably explains why airlines are rethinking Asian expansion.

There’s been a dark cloud of uncertainty hanging over Milwaukee during the last few weeks as Midwest worked on its latest round of restructuring. Sure, they had already announced that the MD-80s would be retired and that employee wages would be slashed, but it never seemed to be final. As of yesterday, we now know the airline’s full plans for survival and it once again involves shrinking. It now seems more clear to me that Midwest aspires to be a regional operator for the new Delta.

After retiring the MD-80s, Midwest had planned on operating 25 717s. Now, 16 of those will be returned leaving only 9 in the fleet. How will they replace them? With 12 Embraer 170s from Republic.

So, Midwest will now operate only 21 aircraft, down from 37 before this started. (I’m ignoring the SkyWest operated CRJs for this discussion.) Oh, and the new aircraft will have 23 fewer seats than the new 99-seat configuration on the 717s. Clearly, losing four more planes means that some routes will have to be cut or frequencies will have to be reduced. None of the schedule changes have been announced yet, but it has to be coming.

Most interesting here is the addition of the Republic Embraers. These planes will initially be operated by Republic, but Midwest plans on bringing them under their own certificate in the next couple years. It’s important to note that these aircraft will remain in the 76-seat, 31″ pitch configuration they had when they were flying for Frontier. Remember when Midwest had plush 2 x 2 seating on all its aircraft? That’s now become Midwest Class, and you’ll only find it in the first ten rows of the nine remaining 717s. Everything else is standard coach.

This latest restructuring sees new funding from TPG and Republic (I talk more about that on BNET today), but the codeshare and frequent flier partnership with Northwest isn’t going anywhere. So, let’s look at where Midwest might be in a couple years. They’ll have 12 Embraer 170s flying in standard coach configuration. Is it really a stretch to think those will be flying under the Delta Connection banner (assuming the merger goes through)? As for those remaining 717s . . . I can’t imagine it will be hard to get rid of those. The CRJ contract with SkyWest can disappear as well. If Delta likes what they see, they could send more Embraer flying over to Midwest over time, I suppose.

It’s a slow and painful transition for Midwest, that’s for sure, but I now see a path for where they going. It kind of reminds of what Midway did after they converted into a (now-failed) express carrier for US Airways. It might mean survival for them if Delta feels generous, but the days of a true premium product are fading quickly.

American’s Pilot Fighting for Compensation Restoration Once Again
Once again, American’s pilots are fighting for “compensation restoration,” but take a look and you’ll see a very flimsy and inaccurate argument.

Frontier Gets Another DIP Option
A couple weeks ago, it was questionable whether Frontier would find any financing. Now they have a second offer to help.

Delta Adds Wi-Fi, Cancels Freedom Air Flying
Yesterday, Delta said it would add wi-fi to its entire fleet, but also announced that it would be ending its regional agreement with Freedom Air.

Southwest’s Fee-Fighting Marketing Efforts
Southwest has really gone all out to promote its “no-fee” strategy. They’ve even brought in the Super Heroes. But will it work?

Northwest Writes Off Midwest Investment
Northwest has decided to write off its investment in Midwest. Is this an ominous sign for the little airline or is it just a clean-up exercise before Delta comes in?

We knew it was coming. When Midwest said it would ditch its MD-80s, that had to mean a lot of flight cuts and schedule shuffling. Well, now we know the extent of the damage. The new schedule not only cuts 11 cities, but it shuffles a lot of service around as well. This all begins on September 8.

That day, Midwest service to San Diego, Ft Lauderdale, and Ft Myers will end completely. Midwest Connect will also drop Baltimore, Hartford, Louisville, Muskegon (Michigan), Raleigh/Durham, St. Louis, San Antonio, and Wausau/Stevens Point (Wisconsin). Madison (Wisconsin) will lose flights to Kansas City but it will keep Milwaukee flights.

Los Angeles and Seattle will lose Milwaukee flights, probably because the MD-80 was the only plane in the fleet that could make it nonstop. The 717 will serve both those cities from Kansas City instead. Here’s a crudely drawn map as only I (or an untalented 5 year old) could put together. The slashes are Midwest Connect drops and the “x’s” are Midwest drops.

Oh yeah, I almost forgot. Midwest is also expanding its Northwest codeshare to include many more city pairs as part of this. Anyone get the sense that Midwest is quickly slipping into irrelevance? They’ve already asked for draconian pay cuts from their employees, but part of me thinks the ones who keep their jobs are the unlucky ones. My guess is that as the airline strengthens its ties with Northwest, more and more Midwest service will slip away.

As you can see in the map above, the airline now is essentially connecting Milwaukee and Kansas City with a handful of cities on the coasts. Is that not something Northwest could build up overnight if they really wanted to? It may just be a matter of time.

I know I mentioned it before, but I thought it worth mentioning again that I’m now the airline blogger for BNET. My posts on Cranky are primarily focused on the frequent (or not so frequent) flier, but over on BNET, I get into more on airline management. Since I know that the last thing you want is to have to check two different places to see what I’m writing about, I thought I’d do a couple things to make this easier to find my content.

First, I’ve started using Google site search. Now anytime you search for something on Cranky in the upper right hand corner search box, it will also return results from BNET if there’s a better match for what you’re looking for. Cool, huh?

Second, I’m going to start posting every Saturday a summary of the previous week’s posts in BNET. If you’re interested, head on over and check out the full posts. If not, well, no big deal. Since today is the 4th of July, I’m not posting a regular post today. So, I thought I’d kick off my first week of this effort by posting a day early. Usually, you’ll still see my regular number of weekly posts with this bonus summary on Saturdays.

Monday, June 30
Midwest Facing Pay Cuts, Fleet Cuts, Layoffs
Midwest Airlines is facing some massive cuts in flying and employee pay right now. What will the future hold for these little guys?

Tuesday, July 1
Mesa Air Group Releases Delayed Second Quarter Earnings
Mesa announced a profit in its very-delayed 2nd quarter earnings release, but thanks to a settled lawsuit, all is not as rosy as that may sound.

Wednesday, July 2
Frontier Loses $22 Million in May
Bankrupt airlines have to report their finances monthly, and Frontier’s May was a very ugly one.

Thursday, July 3
Allegiant’s Incredible 94% Load Factor
Allegiant posted a fairly amazing 94% load factor in June. How is that even possible?

After I wrote my post “Booking A Flight In a Time of Uncertainty,” I knew it was bound to bite me. Sure enough, it happened yesterday when Midwest canceled one of my flights this summer. Though that’s a big deal to me, you guys probably don’t care. But there were a couple of things that I found during this process that I thought might be worth writing about.

It started just after lunch when I simultaneously received an email and a recorded phone call saying that there had been a schedule change and I needed to call Midwest to be reaccommodated. Uh oh. Since they said I had to call to be rebooked, I knew what that meant. My flight was toast.

I called the airline and had to wait for a full 10 minutes before someone answered to rebook me. Unfortunately, our redeye from LAX to Milwaukee has disappeared, so they offered to rebook us on a morning flight with a) a four hour connection in Milwaukee or b) an overnight in Milwaukee. Um, no.

So, I quickly went online while I sat there weighing my options and noticed that there were alternatives that were actually cheaper than what we originally paid. I told Midwest I wanted a refund and they obliged. Then I rebooked on Northwest (I know, I said not to do that in my post, but it was convenient). Now, we’ll get to our destination a little earlier and we’ll save $160 between the two of us. That brings me to my two points.

1. Since I had to wait for 10 minutes on the phone with Midwest, something tells me that our flight wasn’t the only one that was canceled. Anyone have any details on what else might have quietly been cut out?




2. Why the heck have fares gone DOWN for a flight this summer?!? That is definitely not a good sign for demand trends. I mean, I’ll gladly take it, but I certainly would have expected to pay more. Airlines cannot afford to be lowering fares right now.

Hopefully these flights won’t be canceled on me, but in this environment, who knows. At least I’m not flying Silverjet.

AirTran’s long-awaited assault on Milwaukee is now in full force. Just this week, they announced twice daily flights to LAX and Boston as well as once daily flights to Seattle, San Diego, and San Francisco. Lastly, they’ll add a second daily nonstop to Vegas. How nice of them to announce this just as the Northwest/TPG acquisition of Midwest gets approved. These new flights all start in May. For more details, read the press release.

Now the fun begins. After AirTran was spurned by Midwest in favor of a Northwest/TPG combo, everyone was waiting for them to enter the market on their own. They’ve slowly built up service there, but this will be the biggest increase yet.

Will Midwest fight back? Will newfound-uncle Northwest step in to fight for them? Does AirTran have any chance of making this work? I’d say it’s definitely unclear, but you know there’s some response in the making.

What we do know is that this will mean looooow fares for Milwaukee until it all gets sorted out. If you live in Northern Illinois (or Eastern Iowa, as I often like to call my friend’s place in McHenry), you might want to look north for some good deals. Enjoy it while you can.

Over the last couple years, Midwest has been quietly changing its model to the point where they’re becoming just like every other airline. Sadly, I’d say the transformation is now almost complete.

Back in the day, Midwest was head and shoulders above the rest. While most airlines served meals in coach, Midwest served things like lobster on china. As airlines began to pack more seats on planes, Midwest stayed strong with wider, more comfortable seats throughout. Service was excellent and yes, it was finished off with a fresh-baked chocolate chip cookie. Today, the cookie and the good service are about all that’s left.

Meals are now buy-on-board and the china is long gone. Even the seats, the biggest differentiator have started to disappear. A couple years ago, Midwest decided to have two levels of service. Their 717s would continue to have “Signature” service with the nice wide and cushy seats. But on longer routes to leisure destinations, they started flying MD80s in “Saver” service, configured just like every other airline with a bit more legroom.

Earlier this year, they decided to standardize the fleets to have a little bit of both onboard. Yeah, that made me think that Saver = Coach and Signature = First Class, but that’s not exactly the case. Yesterday, they put out a press release trumpeting that their MD80s now all have Signature seating on board. Somehow I doubt we’ll see the same release when they put a bunch of Saver seats on the 717s by the middle of next year.

If you’re on an MD80, you’ll have the option of paying $60 extra per segment just to sit in the nice seats. Keep in mind, all you get to do is sit in those seats. Like Spirit, there is no difference in service when you’re up there. It’s just a bigger seat. And though I haven’t seen it confirmed in print, it appears that the seats will also have the same seat pitch as the ones in back as well. Right now, the MD80s in all-Saver configuration have either 143 or 147 seats an 33 inch pitch. The new configuration will see 12 in Signature and either 127 or 131 in Saver. Each of the three rows in Signature will have 4 seats instead of five, so I understand losing 3 seats here, but I’m not sure where the fourth has gone. Either way, seat pitch shouldn’t change.

Oh, and if you want to sit in those seats, you can only buy them at the time of check-in or at the gate itself. You can’t do it in advance. So, if you really want those seats, check-in early or you might be stuck in the back.

With Northwest taking a 47% stake in the airline recently, we should be happy the product hasn’t started to get even worse than this.

Remember how I said there was no reason AirTran couldn’t try to build up Milwaukee on its own even after failing to take over Midwest?

Here it comes.

This morning, the airline announced that they will begin deploying troops, er, bumping up Milwaukee flights just in time for the winter season on December 20. All those snowbirds will now have the option of flying AirTran to Phoenix once a day. Yes, US Airways and Midwest already fly this route, but maybe AirTran will bring down fares enough to help the Brewers actually get more than a few hundred people at their spring training games this year.

Oh, but that’s not all. That same day they bring back daily seasonal flights to Tampa and Ft Myers. I know they had Tampa daily last year, but I think Ft Myers may not have been as frequent if it flew at all.

And I (mis)quote . . . “Heaven has no rage like love to hatred turned / Nor hell a fury like an airline scorned.”

I got a little geeky yesterday with all the talk of the Midwest takeover, but I didn’t actually bother talking about the impact on customers. Sorry about that. Yesterday afternoon, it got even more interesting as AirTran came back with a bid that’s a quarter higher than the TPG one. So, we have two competing bids. What’s best for you?

The focal point here is clearly Milwaukee. That’s the home of Midwest and their largest base of operations. It is also what appeals to AirTran. If you live in Milwaukee, you’ve been fighting tooth-and-nail to keep Midwest independent so you can have your hometown airline. Now that the airline will likely be bought by someone, you might want to change your stance.

On one side, we have the TPG/Northwest bid. This is best for Northwest since it basically helps eliminate a competitor. Though they say that Northwest won’t have any management control, you can bet that’s a crock. That’s likes saying Richard Branson has no control over Virgin America.

So what’s best for Northwest here? A nice small airline that’s friendly to them and is just big enough to keep competitors out will do the trick. You probably won’t see much growth, and it’s more likely you’ll see it shrink over time. Frills will start to disappear as TPG tries to get its money out of the investment. The airline will not be the same. If you live in Milwaukee, the last thing you want is more dominance from Northwest. You want more choice. This is not the best outcome for customers.

If there is any winner in this deal other than Northwest, it’s CEO Tim Hoeksema. He clearly likes this deal because he gets to keep his job, even if it is at the expense of his employees. If the airline does try to get “more efficient” and doesn’t grow, that means layoffs are coming. Apparently that’s ok with Hoeksema as long as he keeps his job.

On the other side, we have the AirTran bid. In this offer, you’re just about guaranteed to get more flights as AirTran continues to try to establish a beachhead in the Midwest. After their bid to buy ATA and establish a Chicago hub failed, they’ve decided the next best thing is to move up the lakefront and go to Milwaukee. So, while the Midwest level of service will undoubtedly go downhill, there will at least be more flights to more places for less money. That seems like a better outcome to me.

And for current Midwest employees, that also means that their jobs would probably be more secure since AirTran will need people to run the growing operation. Well, almost all jobs would be more secure. CEO Hoeksema would lose his, and since he’s already shown he’s willing to screw his employees to save his own job, this will be a tough fight once again.

Of course, if Northwest/TPG succeeds, there’s nothing saying that AirTran won’t try to make a run at Milwaukee on its own anyway. I’d have to think that would not come out well for Midwest in the end. No matter what, it’s unlikely that Midwest will continue in its current form at this point.