Tuesday, August 14, 2007

Where Midwest's strategy may fail

There's been a flurry of talk -- mostly speculation as details are scant -- about the impact of TPG's buyout of Midwest Airlines (technically, the parent company) and its impact on airline travelers.

The buzz is that TPG may be banking on a simmering desire by frequent business travelers for premium service such as that offered by the pre-9/11 Midwest Express.

If so, then this may run afoul of plans by Midwest to convert its "two-across" aircraft to squeeze more seats into "the back of the bus" with those narrower seats selling for less.

Seems plausible except when you consider that on other airlines frequent flyers who buy seats in the back of the bus have a shot an upgrading to first class. The Midwest strategy may only work if frequent flyers have a chance to upgrade to any unsold premium seats. Otherwise frequent flyers may opt to go with competitors who offer free upgrades.

One of the other unknowns in the last day's discussion is the impact on Kansas City where Midwest has been increasing its presence. Like Milwaukee, Kansas City is underserved and it may well be that TPG will look at increasing service there.

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