A couple of weeks ago I wrote about Airtran’s decision to enter the Milwaukee – Dallas / Ft. Worth market using Skywest Airlines.  That post is HERE.

I noted that American Airlines has virtually owned this market with Midwest also having a nice chunk and AA hasn’t really had much in the way of competition for that route.  Well, the American Airlines of old has responded.  According to the Airline Biz Blog, AA is adding flights to that route using American Eagle and those flights match up closely to Airtran’s announced times.  No one should be too surprised that AA has responded this way since it’s been their strategy to flood new competition with capacity and frequency and to capitalize on their hub connections. 

Will it work?  Many would give AA the advantage in this battle because they do have a tremendous number of connections through Dallas.  The problem is, my sense is that the main part of this route is traffic that originates and ends at those two cities.   I’m not sure there is a whole lot of connecting traffic.  Certainly there is some. 

However, American Airlines has kind of abused Milwaukee for several years charging very high fares for that route and Midwest has never challenged them much instead choosing to enjoy an uneasy level of detente.  Now we see Midwest, Airtran, American Airlines and, indirectly, Southwest Airlines in this market.  Interesting. 

The next move is up to Airtran.  If they keep Skywest aircraft (50 seat CRJ-200)on this route and don’t upgrade it to their own aircraft, I suspect American Airlines will win this fight.  If Airtran chooses to move their B717 or even their B737 (I suspect the former is a better fit) on to the route, I think American Airlines might just see their traffic erode badly.  Milwaukee to Dallas consumers are accustomed to the B717 and, I think, would enjoy the relative comfort and opportunity to upgrade to Business Class (cheap and easy to do on Airtran). 

Midwest is the unknown.  Frankly, they are using their Embraer E-170 aircraft (76 seats, all coach) on this route now and while it is certainly better than American Eagle’s ERJ-145s (50 seats, cramped coach), they still aren’t what those customers are accustomed to enjoying on that route.   Until less than a year ago, Midwest flew very comfortable 717 aircraft that included both a comfortable business class as well as a comfortable coach seat.  Airtran can offer that now.

Would AA add MD-80 or B737 aircraft to the route?  No, they don’t have aircraft available and the best they could do is, perhaps, a CRJ-700 via American Eagle.  However, those aircraft are already very busy on other routes. 

American called Airtrans’ bluff and even raised the stakes, so to speak.  American Airlines is not in the habit of giving up either so we can expect that they’ll keep these frequencies (and the lower prices) as long as they think they can to preserve the market share.    Right now, they are offering a matching $89 fare (each way) for advance purchase.  However, their remaining economy fares are $678 and $863 each way (there is a First Class fare for over $1700 each way but which requires a connection to someplace like Chicago so you can fly on a mainline aircraft).   I think we see where Airtran can offer real value here. 

So, we know two things.  First, it is up to Airtran to make another move or accept the status quo.  Second, there is way too much competition going on for Milwaukee traffic.  Some airline will have to quit.

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