Saturday, August 18, 2007

Midwest Airlines: Time to go back to its roots

Now that TPG Capital beat out AirTran for control of Midwest Airlines, the task ahead is really what it was all along: running a successful airline.

To do that Midwest CEO Tim Hoeksema needs to pay attention to Midwest’s roots, something he’s strayed from and for which he needs to be called out.

Midwest distinguished itself by offering chef catered meals on china served on passengers seated two-across in fine leather seats. Not to mention the signature chocolate chip cookies.

After the September 11, 2001 terrorist attacks and the resulting airline industry nosedive, Tim initiated a number of cost cutting measures.

The great meals are gone. The signature seating has been replaced on some routes by traditional cramped coach. Tim thinks passengers really like those cramped, silly 50-passenger Canadair regional jets, an idea so full of crap that it shows he never talks to customers (or, if he does, talks to the wrong ones).

While these moves helped in the short run, they aren’t likely to hold up. It’s time to get back to Midwest’s routes.

For example, Tim wants to put some regular seating in with the premium seating. Duh. Northwest Airlines, which saved Tim’s hiney, already does that. It’s called coach vs. first class.

Instead, Midwest needs to bring back the great meals. They don’t need to be free. They used to cost the airline ten bucks. So, why not give passengers the opportunity to book a meal? Ten bucks for one of those great Midwest meals vs. spending eight or nine on airport food. That’s a no-brainer.

The saver service is appropriate – those are the planes with regular coach seating – but fares need to be competitive. They aren’t.

Midwest needs to do more to court passengers for its premium seat service. How?

Well, what about northern Illinois? Midwest used to advertise for those passengers but advertising isn’t enough.

One option would be to check into subleasing gate space at O’Hare. Midwest could then shuttle O’Hare passengers directly to Milwaukee and onto one of those great signature flights.

Another option would be to provide free shuttle bus service from far northern Chicago suburbs. (Of course, you don’t want to run those busses on the Illinois all-toll-and-no-way lest they encounter frequent traffic delays.)

Bottom line: Midwest gained fame as a contrarian airline. If it doesn’t go back to its roots, then AirTran might as well have taken it over.

1 comment:

Dad29 said...

All that is nice, but...

The PRICE counts. Top-line increases result in bottom-line increases if and only if passenger volume holds firm and costs do not rise to negate the top-line increase.

One suspects that YX got hit by costs AND by deteriorating volume.

And one suspects that market research tells YX that increasing the top-line will hit volume hard.