So why did Republic buy Midwest Airlines?

Let’s summarize where Republic Airways is today with its strategy of purchases over the past few years,.

1)  Bought Midwest Airlines and traded away its mainline aircraft for E-170 and E-190 aircraft.

2) Bought Frontier Airlines, chased away the CEO making that enterprise cash positive.

3) Merged brands and used a mish-mash of aircraft to provide service in both Denver and Milwaukee focus cities causing confusion among consumers.

4) Unable to get Frontier to earn money and now is seeing it as such a drag on Republic earnings that they’re making deals with labor where they trade equity for labor savings.

I’m not against Bryan Bedford (CEO of Republic Airways) or even against Republic Airways itself.  Not in general.  However, I cannot see what it got for its money by buying Midwest Airlines and I don’t believe anyone else saw the value there either.  He didn’t turn it around and it didn’t provide a very good footprint in Milwaukee that made competing against Airtran and Southwest very viable.  The truth is, Midwest should have gone to Airtran.  On the other hand, did Airtran dodge a bullet?

I do think that Frontier’s success was based upon its people and, more specifically, Sean Menke.  I do not think that Republic understood that substituting available aircraft in for Frontier branded and operated aircraft for a hodge podge of flights was a *bad* idea.  Brand is everything in an airline.

Brand stands for what, exactly, the consumer can expect when he/she buys a ticket on them.  The lack of consistency and lack of focused marketing and the lack of a coherent route plan has made it possible for Southwest Airlines to start taking away market share in Denver.  Even United may be benefitting. 

There was a reason why SWA wanted Frontier.   Frontier (pre Republic) was the airline that SWA couldn’t seem to knock down.  SWA thrived in Denver at United’s expense rather than Republic’s.  The airline that can fight off SWA is one that SWA is interested in.  SWA knew that Frontier’s model was working and working well despite hard competition from SWA.

Rather than identifying the value that Frontier had in its operating model, Republic just did what they wanted and lacking the knowledge of how to operate a mainline branded airline, they made some real amateur moves.  This is where we learn that just because you can operate a regional airline working contracts for legacy airlines successfully doesn’t mean you know *anything* about running a mainline airline itself.

But to Bedford & Co’s credit, they are trying to solve problems well in advance of when those problems become almost unsolvable.  At least cost wise and those guys know how to manage costs, I think.

Yet, there is something missing and that is coherent, focused brand leadership in the form of a relatively independent president of the company.  It won’t be Sean Menke but you can find talent elsewhere.  There are plenty of airlines who’ve got people who do understand what’s needed. 

I think ego, however, will preclude that happening and we’ll see Frontier sold off to another airline eventually.  My guess?  Jetblue.

One Response to “So why did Republic buy Midwest Airlines?”

  1. I agree100%..The whole Frontier mystic was its people, it clean plans, it different way of treating you…and when Republic started the bland service, mixing up the brand message Denver customers felt their little slice of flying heaven was gone and started just purchasing based on price. Before, Frontier had such a sense of loyalty and now…gone. BUT I think they can get it back really quickly…Denver people travel and LOVE Frontier, bring back the awards cards credit card with perks for big spenders easy way to make $ and keep folks coming back, bring back a few animal commercials quick! Go after SWA, why you let them go after your routes I will never know..go after theirs!

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