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Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

This is one of those threads where I've had far too much caffeine in one day. IND is the Bermuda Triangle for Northwest, AirTran and Midwest. With a failed attempt to get a hub in MDW and a failed attempt to takeover Midwest and gain a hub in MKE it looks that IND would now be the front runner for an AirTran hub. I'm not sure if that is a good thing or a bad thing but lets look at the entertainment side of the story.

Northwest appears to be involved in the acquisition of Midwest by a private equity firm.

Northwest and Midwest are setting up code share flights and have limited frequent flier mile sharing (or whatever you want to call it.)

AirTran tried but failed to take over Midwest.

Midwest and AirTran have a ground handling agreement at IND.

Northwest and AirTran compete on most routes except ATL which tickets are available for sale through NW via a Delta code share agreement.

AirTran wants a hub in this region. Northwest will have no part of it. Both airlines have some kind of connection contractually with Midwest.

So... what becomes of the three airlines here? Will any of the agreements between the airlines get voided? Will AirTran cut, maintain or expand their service here? Will Northwest maintain their level of service at IND or will they increase capacity and cut prices to finish AirTran off in IND before they have a chance to try and build a hub? Perhaps nothing with the three airlines change at all and this thread was absolutely pointless lol.

Your thoughts?

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Joined: 06 Jan 2007
Posts: 106
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I suspect that nothing will really change. Even though AirTran failed in their attempt to purchase Midwest, companies move on and still work together. Midwest has no market here, so they will likely keep their limited RJ service to MKE. Northwest will continue its focus city and possibly expand more. AirTran will probably stay around the same size, focusing on leisure destinations from IND. So I doubt that this will have any impact on IND.

Site Admin

Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

So you think AirTran will give up on trying to get a hub in this area of the country? They are 0 for 2 now. Question is are they willing to risk 0 for 3?

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Joined: 06 Jan 2007
Posts: 106
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I'm not sure. I could see them giving up and trying more point to point like they have been with Las Vegas. They could still try to build up MKE without Midwest, but I would assume that MKE doesn't have the facilities to support two airline hubs. I don't think IND has any chance of becoming a hub. NWA will just continue to add frequency and cut prices to keep AirTran out. Maybe they'll try to build up STL.

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Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

STL is unlikely as they'd have to fight AA and WN. You basically have two large focus cities there already. I doubt the market there is big enough to support three. I don't think MKE has the market or facilities to support a 2nd hub. And I agree with you on NW. While FL would likely get what they want here from the city it is unlikely that NW would go along with it. Before you know it they'd have 70 to 80 flights a day here to 25 destinations which would make it nearly impossible for AirTran to get a hub going. Because like with MKE this market isn't big enough to support two large operations like that. Guess it depends on what they have the stomach for.

Of course the first thing that sprung up on airliners.net is that they'd go after Frontier. I doubt that would happen. It would just smell like desperation to me. Like some poor kid asking around last minute for a date to the prom.

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Joined: 06 Jan 2007
Posts: 106
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Yeah, I don't see them going after Frontier at all. I could see them expanding their agreement to a full codeshare though.

I still think the FL/YX deal is dead even though the largest shareholder still isn't happy with the all-cash offer. We'll see how that plays out and if other shareholders join in with them or if the DOJ is unhappy with NWA's involvement.

The only reason I could see them trying to build up STL is because that's the only large airport I know of in this region that has so many gates available. They could probably compete with AA and WN, but it would take a long time. STL would be good for them if they wanted to build up a connecting hub overnight, though.

As far as IND, I really don't think we'll see much more out of FL here. They've been focusing on nothing but leisure destinations. Maybe they should try a business destination just for the hell of it and see how their pax loads are. I'm sure NWA would quash it, but you never know.

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Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

Problem for STL and FL is that with any decent schedule most of the traffic would be feed. WN and AA have eaten up the O/D. The market just isn't big enough for 3 large focus cities. They could have 50 free gates and it wouldn't matter if you didn't have the pax to fill the flights.

If FL wanted they could expand to I'm estimating around 35 flights over the next year. That would be all the capacity they could add until the new terminal opens. In November 2008 they could pick up as much as an additional 6 gates depending on what the other airlines did. They could add 50 or 60 additional flights with that. There is no reason they couldn't be running 80 to 90 flights a day. If they were serious about building up a hub here they could get an additional 10 gates added to a concourse allowing them to add 80 to 100 additional flights. If FL growth demanded it the other concourse could be expanded and airlines on the one concourse would be moved giving FL an entire concourse of 30 gates. That is likely all the growth FL will ever need in this region. That would cover them for 20+ years. I don't know many airports in a position to handle that kind of growth quickly and cheaply like IND can. That is the beauty of the new terminal. It is positioned and designed for cheap and easy expansion. Other airports require billion dollar projects to add some gates. It would cost a fraction of that here.

But all of this likely doesn't matter. I don't honestly think FL is going to do that. And even if they tried NW is going to put up a fight. Who knows. I could be wrong.