NWA hits back at AMR
06-15-2007 | 01:31 PM
#1
Thread Starter
Fun Officer
Joined: Feb 2005
Posts: 515
Likes: 0
From: Dallas, Texas
NWA hits back at AMR
Transportation
Northwest Hits Back at AMR
By Ted Reed
TheStreet.com Staff Reporter
6/15/2007 4:35 PM EDT
URL: http://www.thestreet.com/newsanalysi.../10362931.html
Despite all the changes in the airline industry, some carriers haven't abandoned their guiding principles -- and "keep out of my hub" is the oldest principle in the book.
That's why there was no surprise in Friday's announcement that Northwest (NWA) will begin service between New York's LaGuardia Airport and Dallas effective Sept. 5. Not after AMR's (AMR) American said last month that it will begin LaGuardia-Minneapolis flights the same day.
To be clear, it's OK to fly from your hub to my hub, but it's not OK to fly from a third city to my hub. Northwest has long been among the most prominent enforcers of the code.
"Some things never change," said aviation consultant Robert Mann. "Northwest is well known for being defensive and retaliatory. It's pretty well understood."
Northwest's most recent enforcement exercise took place in February in response to new flight announcements by Frontier (FRNT) .
Frontier, which has its hub in Denver, said it would begin flights from Northwest's hub in Memphis to Denver, Las Vegas and Orlando, Fla. Days later, Northwest said it would begin service from Memphis to Denver, Las Vegas and Orlando -- plus add new service between Indianapolis and Denver. In other words, it not only matched the Memphis service, but also invaded Denver.
The industry has seen similar moves before. In 1993, Eight-month-old Reno Air announced plans to begin service between its Reno hub and Minneapolis. So Northwest said it would add flights from Reno to Minneapolis, Los Angeles, San Diego and Seattle.
"Their intent is to punish us for flying into their hub," Reno Air President Jeff Erickson told the Los Angeles Times then. "They think they can drive us out of business because we are small."
Subsequently, the Transportation Department intervened, and Northwest scaled back its response to compete only on the Reno-Minneapolis route. Meanwhile, the airline industry remains the prototypical small world, insulated not only in its patterns of behavior but also in the people it employs.
So on Thursday, Erickson was elected to the board of Midwest (MEH) , which last month announced a code-share agreement with Northwest.
Northwest Hits Back at AMR
By Ted Reed
TheStreet.com Staff Reporter
6/15/2007 4:35 PM EDT
URL: http://www.thestreet.com/newsanalysi.../10362931.html
Despite all the changes in the airline industry, some carriers haven't abandoned their guiding principles -- and "keep out of my hub" is the oldest principle in the book.
That's why there was no surprise in Friday's announcement that Northwest (NWA) will begin service between New York's LaGuardia Airport and Dallas effective Sept. 5. Not after AMR's (AMR) American said last month that it will begin LaGuardia-Minneapolis flights the same day.
To be clear, it's OK to fly from your hub to my hub, but it's not OK to fly from a third city to my hub. Northwest has long been among the most prominent enforcers of the code.
"Some things never change," said aviation consultant Robert Mann. "Northwest is well known for being defensive and retaliatory. It's pretty well understood."
Northwest's most recent enforcement exercise took place in February in response to new flight announcements by Frontier (FRNT) .
Frontier, which has its hub in Denver, said it would begin flights from Northwest's hub in Memphis to Denver, Las Vegas and Orlando, Fla. Days later, Northwest said it would begin service from Memphis to Denver, Las Vegas and Orlando -- plus add new service between Indianapolis and Denver. In other words, it not only matched the Memphis service, but also invaded Denver.
The industry has seen similar moves before. In 1993, Eight-month-old Reno Air announced plans to begin service between its Reno hub and Minneapolis. So Northwest said it would add flights from Reno to Minneapolis, Los Angeles, San Diego and Seattle.
"Their intent is to punish us for flying into their hub," Reno Air President Jeff Erickson told the Los Angeles Times then. "They think they can drive us out of business because we are small."
Subsequently, the Transportation Department intervened, and Northwest scaled back its response to compete only on the Reno-Minneapolis route. Meanwhile, the airline industry remains the prototypical small world, insulated not only in its patterns of behavior but also in the people it employs.
So on Thursday, Erickson was elected to the board of Midwest (MEH) , which last month announced a code-share agreement with Northwest.
Last edited by RockBottom; 06-15-2007 at 01:36 PM.
06-15-2007 | 03:15 PM
#2
Gets Weekends Off
Joined: Jul 2006
Posts: 652
Likes: 0
Ahhhhh,
NYC (including JFK and LGA) is a hub... I have spoken directly with the MSP station manager. This is a route AAdvantage customers (platinum business pax)have been asking for. So they do not have to connect in ORD.
I do not think AMR is very worried about NWA putting a couple flights on LGA-DFW. We have MANY flights a day on that route.
Oh well, not trying to start a mine is better than yours thread. As the LCC pilots like to say "there is plenty of the pie to go around."
AA
NYC (including JFK and LGA) is a hub... I have spoken directly with the MSP station manager. This is a route AAdvantage customers (platinum business pax)have been asking for. So they do not have to connect in ORD.
I do not think AMR is very worried about NWA putting a couple flights on LGA-DFW. We have MANY flights a day on that route.
Oh well, not trying to start a mine is better than yours thread. As the LCC pilots like to say "there is plenty of the pie to go around."
AA
Last edited by AAflyer; 06-15-2007 at 05:23 PM.
06-17-2007 | 07:42 PM
#3
Gets Weekends Off
Joined: Dec 2006
Posts: 1,784
Likes: 0
From: I was acquired, Not Hired
AA,
I think we can both agree that this will be an interesting experiment for a couple reasons.
First and foremost, I find it odd (at first glance) that NWA would retailliate on a route where it doesn't have presence nor critical mass on either end. However, as a member of Skyteam, NWA does have possible feed from their other partners Delta and Continental. With that being said, it's still my humble opinion that NWA would do better to defend the route MSP-LGA with saavy marketing and passenger incentives in the form of pricing and freq. flyer bonuses, than to throw assets at a route which may not materialize.
MSP, for NWA has been a good hub in terms of revenue. Even though Air Tran and Sun Country have flights to MSP, their LCC presence and effect on NWA's revenue isn't as pronounced as say, Southwest's presence at Philadelphia was to USAirways (in terms of Revenue per Avail Seat Mile).
Someone from NWA might be able to confirm it, but domestically I would venture a guess that MSP to DCA and/or LGA and the many cities they serve within 300 miles of MSP are their bread and butter. That's why I have the opinion that defending that route would be more important than throwing assets at the DFW route, just to prove a point.
AA, I'd be curious to hear how the respective routes are doing for both the carriers if you come across any data.
Any other opinions ???
Regards,
FF
I think we can both agree that this will be an interesting experiment for a couple reasons.
First and foremost, I find it odd (at first glance) that NWA would retailliate on a route where it doesn't have presence nor critical mass on either end. However, as a member of Skyteam, NWA does have possible feed from their other partners Delta and Continental. With that being said, it's still my humble opinion that NWA would do better to defend the route MSP-LGA with saavy marketing and passenger incentives in the form of pricing and freq. flyer bonuses, than to throw assets at a route which may not materialize.
MSP, for NWA has been a good hub in terms of revenue. Even though Air Tran and Sun Country have flights to MSP, their LCC presence and effect on NWA's revenue isn't as pronounced as say, Southwest's presence at Philadelphia was to USAirways (in terms of Revenue per Avail Seat Mile).
Someone from NWA might be able to confirm it, but domestically I would venture a guess that MSP to DCA and/or LGA and the many cities they serve within 300 miles of MSP are their bread and butter. That's why I have the opinion that defending that route would be more important than throwing assets at the DFW route, just to prove a point.
AA, I'd be curious to hear how the respective routes are doing for both the carriers if you come across any data.
Any other opinions ???
Regards,
FF
06-18-2007 | 06:25 AM
#4
Gets Weekends Off
Joined: Jul 2006
Posts: 652
Likes: 0
My thoughts exactly,
AA has a large customer base in MSP. Many are our top elite adcantage travelers. Like I said this route was driven by there request. We both in the end there is a usually a group that will fly a specific airline for reward miles, or that specific company has travel contracts.
Not to mention NYC is hub for us, and a large one at that. This is no different that flights we fly to MSP from DFW, or MIA, not sure why NWA thinks this any different than the other citiy pairs.
I will be more than happy to show the data when it arrives. Having commuted out of MSP the last 2 years I will make sure to get from out MSP station manager.
AA recently spent a lot of money on advertising to let NY now we are still a large player in the market. New terminal, new interiors new schedules, and now new market pairs.
Just my .02.
Regards,
AA
AA has a large customer base in MSP. Many are our top elite adcantage travelers. Like I said this route was driven by there request. We both in the end there is a usually a group that will fly a specific airline for reward miles, or that specific company has travel contracts.
Not to mention NYC is hub for us, and a large one at that. This is no different that flights we fly to MSP from DFW, or MIA, not sure why NWA thinks this any different than the other citiy pairs.
I will be more than happy to show the data when it arrives. Having commuted out of MSP the last 2 years I will make sure to get from out MSP station manager.
AA recently spent a lot of money on advertising to let NY now we are still a large player in the market. New terminal, new interiors new schedules, and now new market pairs.
Just my .02.
Regards,
AA
Thread
Thread Starter
Forum
Replies
Last Post
