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

If MKE is so great why does IND beat them? MKE still doesn't serve as many passengers as IND. And their market growth is flat. The reason is that for many it is just as easy to go to ORD. If MKE was so great they'd go better than 7 million passengers served.

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Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

I have to weigh in on Indy's side here. The fact that there is an existing hub at MKE does not mean it's a better place for a hub than IND. There are myriad factors that make a hub successful or not. I think the primary factor in the success of MKE's hub is the fact that it's the ONLY hub for Midwest, an airline which is based in Milwaukee.

The comparison to TZ and US at IND is different. The TZ "hub" was never envisioned as a primary hub - it was always secondary to MDW - you can see this very clearly by just looking at the last route maps before TZ imploded. But when it was here, TZ's IND hub was successful by nearly any measure. TZ went into bankruptcy not because IND proved an inefficient or overly expensive hub airport - it was mainly due to balloon financing on 757 leases which couldn't be overcome during the industry slump after 9/11. And the dismantling of IND as a secondary hub was largely due to the fact that TZ was rescued from bankruptcy partly by an equity investment from WN. Southwest had no interest in maintaining TZ's IND hub operations.

The US hub at IND was a legacy from when US Air was created. US Air wasn't like most other airlines - and certainly wasn't like Midwest. The modern US Air was created after airline regulation ended in the late 1970's, and was the result of the cobbling together of several airlines, including Allegheny and Piedmont. That was how the IND hub came about. There were also hubs at DAY and MCI. All three of those hubs are gone now, save a few nonstop prop-plane services from MCI to very small cities in the Plains. Note that PIT has also been officially dehubbed. While DAY may not have been a good place for an airline hub, given its very small o&d market and proximity to CVG, IND, and CMH, you can't say the same about IND, MCI, and PIT. The loss of US hubs in these three cities is simply a reflection of the US Air business model and history, not a reflection on these airports' suitability for hub operations.

You should also consider the dehubbing of CMH by America West. This was an attempt to establish a second, eastern hub in their network to serve east coast and midwestern locations. The establishment of this hub thrust America West into the ultra-competitive east coast market with a hub that was not ideally located (compared to those in larger cities on the coast like DCA/IAD, PHL, EWR/JFK/LGA, or BOS) and a brand that was unfamiliar to passengers loyal to the established legacy carriers. They were also extended far beyond their roots in PHX. CMH wasn't necessarily a bad choice for a hub, it was just a bad choice for an America West hub.

So just like those examples, IND is not a bad choice for a hub, it was just a victim of the circumstances surrounding the airlines who had hubs here.

If Airtran wiped the slate clean and said, "where should we put a Midwestern hub?", I suspect that MKE would actually be far down the list. IND, STL, MCI, or even BNA could be choices that would beat out MKE for a brand-new hub. But having said that, what would be the cost and future benefits of relocating the existing hub operations at MKE versus the leaving the hub where it already is?

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

Can you even call a location a hub that serves mainly O/D? That is pretty much what YX does. I don't know if a FL hub could survive here or in MKE. In MKE they have people who are very loyal to YX. They expect a certain level of service. NW will make a FL hub very difficult here. They have a very big following here. They serve 20 different nonstop destinations from here. You are also 1 stop from just about anywhere in the world and you get it all under one FF program. That makes it tough for someone to come in compete. What can FL offer that NW can't? Not much really. Even if I were a loyal FL customer I still couldn't fly them to visit my mom. So I'd rack up 10,000 FF miles for what? Any time they try and add a route here NW can match them. I don't think they'd have a chance.

If you want a buy a hub then grab YX. I don't think you are going to be happy with your results as loyal YX customers move to other carriers and your minimal bookings and your low O/D numbers of your flights get diluted even more.

Member

Joined: 15 May 2006
Posts: 728
Location: West Lafayette, IN

What about the commuter arm of Midwest... what do you think the main purpose of that airline is? To provide feeder traffic to MIL. If IND had better pax connection numbers, then I might be able to tip my hat towards IND, but I don't see how an airport that is mostly O/D be considered better than a hub airport.

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

The IND/MKE service with YX is commuter because there isn't much demand between the locations. And it shows you how little connecting traffic they have when as the only service between the two cities they have to scrape by with those small commuter planes. That should be enough to take care of the O/D. I doubt many people here use YX for regular travel. I suspect that is the case most places.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

You're missing the point. You keep looking at this from a personal preference point of view, and not one that makes sense economically.

Your precious "o/d" numbers that you keep tossing out don't work.
If they were important, then you'd see an airline having a hub operation here. And not one at Milwaukee.

Part of the reason for the lower passenger numbers ... Midwest has been slow at forming a complete network. They're smart. They're not overextending themselves. There is potential. There is room to grow. There is room for the numbers to dramatically increase.

If I was building a new airport, I'd much rather have a stable hubbing operation than two finicky "focus" cities that probably won't become anything more than what they have now.

When the new airport is finished, Indianapolis will see an increase in airfares. Mitchell is undergoing tons of projects and it has not affected airfares in the slightest.

Despite the "insignificance" in your opinion of Midwest's operations, the benefits are spread out more evenly for the airport's financial budget. The hubbing allows more PFC charges in the budget and the constant movement of flights allows for solid cash flow from landing fee revenue into other parts of the budget.

Indianapolis Airport managers and officials would do a cartwheel to have a early 1990's US Air - esque operation back ... they'd be doing round-offs to have any type of operation that Midwest has up at Milwaukee.

Site Admin

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

Based on passenger numbers and an estimate of the YX market share in MKE they serve around 3.6 million passengers. That is with a hub. NW here in 2006 served about 2 million passengers. That number looks to increase in 2007. They were able to do this without needing to spend over $200 million dollars to obtain that share.

FL operates in ATL. That place is expensive in the form of delays, taxi times to the new runway and expansion costs. Last estimate I saw was $1.2 billion for that 27 gate terminal. Over $1 billion had to be spent on that 5th runway. You pay more for a better market.

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Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

Northwest simply took over discontinued passenger sevices of an established carrier. They didn't come in and make a huge splash into a market.

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

They didn't? IND has had 2 consecutive years with over 8 million passengers served. That is due in large part to the NW operations. The MKE market is tapped out. Adding seats will do nothing but dilute already weak profits. MKE lives in the shadow of ORD. It will always be crippled by that.


According to Frey, Milwaukee's metro population growth in recent years has sat near the bottom of the country's 43 largest metropolitan areas. That would remain true even if the city's growth had held steady since 2000, according to Frey's data.

For the 2000 to 2004 period, metro Milwaukee's population increased by 1%, according to Frey's data. Among all areas with a population of at least 1.5 million, that increase ranked 38th, ahead of only Detroit, San Jose, Calif., Cleveland, Pittsburgh and San Francisco.

That stagnant growth is significant, said Sammis B. White, a professor of urban planning at the University of Wisconsin-Milwaukee and director of its Center for Workforce Development.

"It's just harder for the local economy to be healthy when you have a central city that is losing population," White said. "That means in order for the metro area as a market to grow, the suburbs must grow even faster to compensate for losses at the center."


Source: http://www.jsonline.com/story/index.aspx?id=337561

While the Milwaukee market has basically died the Indianapolis market continues to explode. As of 2005 the estimated population in the Indianapolis MSA is 1,718,892. We are on pace to add a quarter of a million people to the market for the second straight decade. The Milwaukee market has see a total growth of 109,000 people in 35 years.

The metro population is growing at a significant rate. It is the fastest growing market in this area of the country. Indianapolis is a growth market. Businesses will flock here has they have been. Milwaukee is just too close to Chicago to have a chance. This is pretty much an open and shut case.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

IND - ATA = current NWA operations.

You keep thinking metro population is the save all. It is not. You are wasting your time trying to argue it. Just like you're wasting your time thinking Northwest will launch A330 service to Amsterdam from Indianapolis. Again, putting personal opinions over proven formulas doesn't get you anywhere.

Cities smaller than Indianapolis with much better air service, potentials, or operations.

Charlotte
San Diego
Raleigh - Durham
Nashville
Kansas City
Cincinnati
Milwaukee
Salt Lake City
San Antonio
West Palm Beach
Las Vegas
Memphis
Fort Myers

Site Admin

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

stlgph wrote:

IND - ATA = current NWA operations.

You keep thinking metro population is the save all. It is not. You are wasting your time trying to argue it. Just like you're wasting your time thinking Northwest will launch A330 service to Amsterdam from Indianapolis. Again, putting personal opinions over proven formulas doesn't get you anywhere.

Cities smaller than Indianapolis with much better air service, potentials, or operations.

Charlotte
San Diego
Raleigh - Durham
Nashville
Kansas City
Cincinnati
Milwaukee
Salt Lake City
San Antonio
West Palm Beach
Las Vegas
Memphis
Fort Myers

Actually Cincinnati metro is larger. Milwaukee can be taken off that list. Smaller market and smaller O/D. So it doesn't have better air service. San Diego, West Palm Beach and Las Vegas off the top of my head are good vacation destinations. You can scratch off cities like Milwaukee and Memphis. You simply cannot justify Milwaukee. It is silly to even list them in that group. There is a reason Milwaukee is where it is today. Poor location. You think it is a good location. That could not be further from the truth. The numbers don't lie. It is why the IND numbers are a million ahead of the MKE numbers and why the IND market is now a quarter of million people larger and growing . They are not considered a growth market by hardly anyone. NW will launch the service from IND one day. Will it be an A330? Will it be a 787? Will it be a 757? Hard to say. It will happen though.

Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

Not that I really want to get into this debate with you two, but you should do some fact-checking. Metro-area populations are below, according to 2005 Census numbers, the latest hard numbers available. Indy MSA = 1,958,453

Charlotte 2,120,745 - bigger than Indy
San Diego 2,933,462 - bigger than Indy
Raleigh - Durham 1,509,560 - smaller than Indy
Nashville - 1,498,836 - smaller than Indy
Kansas City - 2,015,282 - bigger than Indy
Cincinnati - 2,113,011 - bigger than Indy
Milwaukee - 1,708,563 - smaller than Indy
Salt Lake City - 1,586,740 - smaller than Indy
San Antonio - 1,889,797 - smaller than Indy
West Palm Beach - 1,243,230 - smaller than Indy
Las Vegas - 1,751,028 - smaller than Indy
Memphis - 1,260,905 - smaller than Indy
Fort Myers - 544,758 - (much) smaller than Indy

Of those that actually are smaller than Indy, several I would disagree with the statement that they have better air service than Indy - Nashville, San Antonio, West Palm, and Fort Myers. I'm not sure why you would consider those places to have better service. And except for the flight to LGW, RDU's service isn't all that great. Kansas City's air service isn't better than Indy's even though it's a bigger metro. Believe me, I'm there once a month. IND's service is way better than MCI's.

But my point was just to add the numbers to your list, so I'll leave it at that.

Site Admin

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

Those numbers aren't accurate btw. They look like CSA's and not MSA's. CSA's are not the accepted standard. Charlotte's MSA is significantly smaller than their CSA. The 2005 MSA population for Charlotte is 1,700,729. That list may be a combination of MSA and CSA or just all CSA.

Member

Joined: 15 May 2006
Posts: 728
Location: West Lafayette, IN

Not to pick at your points, but several of those areas have air traffic fueled by tourism.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

ATAIndy wrote:

Not to pick at your points, but several of those areas have air traffic fueled by tourism.

Check the "tourist" markets carefully. Their numbers are smaller than Indianapolis. Hence use of the word "potential."

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

My cities are listed by demographic market areas ... which is the number/rank of people the market place will attract for business and trade acquisitions.

Site Admin

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

You listed areas that IND has routinely out performed.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

Hence use of the word "potential."