By next summer, passengers flying from Milwaukee's Mitchell International Airport on Midwest Airlines will likely see more nonstop flights and lower fares under the new ownership of Republic Airways Holdings Inc.
But many of the passengers will be flying on smaller aircraft. Also, those jets will have fewer of the wide seats that helped Midwest win a loyal following.
Those conclusions are based on information gathered from Republic Chief Executive Officer Bryan Bedford and airline industry observers. Republic is forming its plans for Oak Creek-based Midwest after announcing recently that it's buying Midwest for the bargain-basement price of $31 million. The sale is expected to close in about a month.
For competitive reasons, Republic doesn't want to announce detailed plans. But Bedford said the new destinations from Milwaukee won't include any surprises.
"Look at what was Midwest's network 12 months ago, and you get a good gauge of where we're headed," Bedford said.
The route network from the summer of 2008 included 118 daily departures from Milwaukee to 38 cities. In September, Midwest made a 40% service cut - among the largest of any U.S. airline - leaving it with 90 daily departures from Milwaukee to 28 cities.
Some flights have been restored, and Midwest now has up to 100 daily departures to 33 cities during its peak summer schedule, said Midwest spokesman Michael Brophy.
Among the cities dropped last year were Louisville, Ky., and Los Angeles. Nonstop service to those cities will be restored in August.
Other cities no longer served by Midwest on nonstop flights from Mitchell International include San Francisco, Seattle, Baltimore, St. Louis and Raleigh/Durham, N.C.
Midwest also reduced the number of flights to Florida leisure destinations, such as Orlando. Midwest executives said the airline would focus on more profitable routes favored by business travelers.
Restored routes possible
Executives at Indianapolis-based Republic will consider restoring any route that is viable, including leisure routes, said company spokesman Carlo Bertolini.
Bedford will likely turn to Frontier Airlines for examples of running profitable routes that compete with low-fare carriers, according to Bob McAdoo, an airline industry analyst with Nashville, Tenn.-based Avondale Partners. Along with buying Midwest, Republic is acquiring Denver-based Frontier for just less than $109 million.
McAdoo said Frontier has competed successfully against low-fare carrier Southwest Airlines, which has a large presence at Denver International Airport. Southwest will begin service from Milwaukee in November with 12 daily flights to Las Vegas, Phoenix, Orlando, Tampa, Kansas City and Baltimore. Southwest is expected to eventually add more flights from Mitchell International.
"The guys running Frontier surprised people with the company's profitability," McAdoo said. "That would give you some hope to do same thing (with Midwest)."
Restoring flights that were cut will help improve the Midwest brand, Bertolini said.
Midwest, which has achieved a reputation for strong customer service, has been hurt by the company's financial woes, including a $477 million loss in 2008. That lack of capital meant that Midwest has been unable to invest in new technology and other areas, Bedford said. Republic, which is profitable, will have the cash to make improvements, he said.
Some lower fares
Republic's larger scale - the company's main business is flying regional routes for larger airlines - and ability to operate more efficiently also allows it to cut fares on certain routes. That will allow Midwest, under Republic's control, to be more competitive with Southwest and AirTran Airways, another low-fare carrier, said McAdoo and others.
AirTran in May claimed a 20.2% market share at Mitchell International, compared with 37.5% for Midwest and 21.9% for Delta Air Lines/Northwest Airlines, which are merging their operations under the Delta name.
Midwest will cut some fares in response to Southwest, said Scott Hamilton, who operates airline consulting firm Leeham Co., of Issaquah, Wash.
"Even high-cost airlines have to offer at least some seats at the same low prices to remain competitive," Hamilton said.
McAdoo agreed but said Midwest will likely only cut fares on a limited basis.
"I think there'll be some discounting," McAdoo said. "But in markets where Southwest doesn't operate, and AirTran doesn't operate, there will be traditional Midwest fares."
Republic will operate Midwest more efficiently in part by dropping Midwest's nine Boeing 717 jets and replacing them with Republic's Embraer 170 and Embraer 190 jets.
Bedford said the Embraer aircraft are more fuel-efficient than the 99-seat Boeing 717s. Also, operating with just one fleet type will reduce training and maintenance costs, Bertolini said.
Midwest already uses the 76-seat Embraer 170 jets on many of its flights and will be adding 99-seat Embraer 190s.
For shorter flights, Midwest will use Republic's 37-seat and 50-seat Embraer regional jets, replacing 50-seat regional jets now flown for Midwest by SkyWest Inc.
The Embraer 170 and 190 aircraft have high ceilings, up to 6 feet 7 inches, along with passenger and baggage space "that rival that of narrow-body aircraft flown by mainline airlines," Bertolini said.
Each Embraer 190 will include 20 seats that are the wide "signature" seats, Bertolini said. That compares to 40 signature seats available on each of Midwest's current Boeing 717 jets.
Despite switching to aircraft that will have fewer "signature" seats, Bedford said the Embraer 190 will compare favorably on passenger comfort with jets used by competing airlines. The Embraer 190 doesn't have a middle seat, which is attractive to passengers, he said.
"I think we've got the better tool to compete," Bedford said.
REPUBLIC AIRWAYS INC.
Headquarters: Indianapolis
Founded: 1973
Operating subsidiaries: Chautauqua Airlines, Republic Airlines, Shuttle America; has bid to purchase Denver-based Frontier Airlines out of bankruptcy
Number of employees: 4,500
Daily flights: 1,200
Cities served: 105
Sources: Company information
Copyright 2009, Journal Sentinel Inc. All rights reserved. (Note: This notice does not apply to those news items already copyrighted and received through wire services or other media.)
