Southwest Airlines transforms air service in Milwaukee - Milwaukee Journal Sentinel

Five years ago this week, on Nov. 1, 2009, Southwest Airlines landed with great fanfare at Mitchell International Airport — an arrival that, as it turned out, would become the centerpiece of a transformation in air service in Milwaukee.

Southwest claimed just under 9% of the airport's market share that first month, in a market dominated at the time by homegrown Midwest Airlines. Since then, Dallas-based Southwest — boosted by its purchase of AirTran Airways — has become the market leader at Mitchell, carrying 45% to 50% of the airport's passengers in an average month.

"When you look back five years ago, we started with 12 trips a day to six destinations," said Jack Smith, senior vice president of operations for Southwest. "This winter, we'll be going to 20 destinations with 48 trips a day.

"The thing that really stands out is we have been able to successfully grow, but we couldn't have done it without the support of the community," Smith said. "It's just been a very good partnership for us."

It's a partnership that Milwaukee pursued for nearly 20 years, according to Barry Bateman, recently retired airport director at Mitchell International.

"Whenever I would speak to the service clubs over my 30 years in Milwaukee, it would be, 'When's Southwest coming?'" Bateman said. "That was always the question that came up in the question-and-answer session. It was clearly an airline that the community wanted."

In fact, Southwest, known for its discount fares and Boeing 737 jets, had been preparing to enter the Milwaukee market as far back as July 2001, but the Sept. 11 terrorist attacks postponed the plan as airlines across the country retrenched and re-examined how they did business.

Some airlines simply disappeared and were never replaced, leaving some cities with severely diminished air service. Southwest's arrival in Milwaukee, along with its subsequent purchase of AirTran, which had a sizable presence in the city, kept Milwaukee on the major airlines' map.

"Fortunately, they kept that (AirTran) franchise," Bateman said. "They didn't just buy it and dissolve it like has happened in other places," with other airlines.

Oil prices affect airlines

There are still plenty of people who grumble about Milwaukee's air service, comparing it to the bygone days when Midwest Airlines flew to numerous nonstop destinations with in-flight perks, such as gourmet meals, that rivaled any in the industry.

The collapse of Midwest's business model can be traced, in part, to July 3, 2008, when the price of crude oil hit $145 a barrel. Airlines could no longer afford to fly planes that were not jammed full of people, and Midwest's fairly luxurious, two-across seating was no longer sustainable.

"It was great while it lasted," said Robert Mann, who runs airline analysis and consulting firm R.W. Mann & Co. in New York.

Midwest wasn't the only airline affected. Carriers across the industry declared bankruptcy, merged, or simply parked their planes, never to be heard from again.

Midwest, though, was different — from the days when it was known as Midwest Express and embraced as Wisconsin's airline — so its disappearance after it was combined with Frontier Airlines in 2010 is still mourned.

"Everybody is still a bit hung over, even though it's been a long time, from the days of Midwest Express," said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce. "Between Southwest and Delta, we're well served — but it's in the context of what travel means today, not in the context of what travel meant 20 years ago."

Bateman says he, too, has heard complaining from some corners about Milwaukee's air service.

"Now, I know that the lawyers in town are not happy that they can't fly to Indianapolis or Columbus or Louisville, take a deposition, and get back the same day," Bateman said. "They're upset. I know that. But it's just the nature of the industry right now."

The days of airlines flying lots of routes with planes that are half-empty are long gone.

Other airports hit harder

For Milwaukee, it could be worse, Mann said.

"Cleveland is essentially now a regional jet operation. Cincinnati is mostly a regional jet operation. Pittsburgh has probably less than half the total activity that it used to have," he said. "I think with Milwaukee, you avoided all that."

Sheehy said much the same.

"I talk to my counterparts in a lot of other markets who had United or American hubbing out of their market and I think they have been hit a lot harder," he said. "What Milwaukee looks like today is we've got a high-quality, low-cost carrier (Southwest) serving a lot of markets out of Milwaukee, and I think people are pleased with what Southwest has been able to deliver."

Southwest overall flies to 93 destinations in 40 states and is the only U.S. airline that has never declared bankruptcy. It employs 46,000 people who serve 100 million customers annually. It is the nation's largest carrier in terms of originating domestic passengers, and it operates the largest fleet of Boeing aircraft in the world.

It grew to where it is today based on a business plan sketched out on the back of a cocktail napkin more than 40 years ago by its founder, Herb Kelleher.

"We never want to take anybody's business for granted," Smith said. "We need every customer, and we want them to bring their friends and neighbors."

Bringing stability

Southwest is one of four airlines that now share control of more than 80% of the U.S. commercial air travel market, and all four — Delta, United, American/US Airways and Southwest — operate flights at Mitchell.

Southwest came to Milwaukee when the region's air market was in flux, said Pat Rowe, marketing director for Mitchell. "What they did was bring stability to the Milwaukee air service market," she said.

Southwest also helped bring fares down in Milwaukee, Mann said.

"Milwaukee was usually one of the perennially high fare markets on the (U.S. Department of Transportation) reports," Mann said. "From 2008 to today, you had Southwest enter the market. You had AirTran enter the market. You had Midwest cease service. You had Frontier come in and try to replace some of it and ultimately conclude that it wasn't going to be a keeper.

"What remains is you've got Southwest with more nonstops to more destinations at much lower fares than was the case in 2007 and 2008. It would be hard to look at it in any way negative, it seems to me."

In the end, price always wins in the airline industry today, Mann said.

"I think what you've got is essentially what the market is willing to pay for," he said. "You end up with only that service to only those destinations that people are willing to pay for.

"I think you could do a lot worse than Southwest having half your service."

Airlines are profitable again, and that should eventually lead to more carriers entering the industry and possibly even expanding.

"When airlines start making lots of money, it spikes the interest of entrepreneurs to get into the business," Bateman said. "It's harder now because it's much more consolidated.

"As the old joke goes, if you want to become a millionaire, take $100 million and start an airline. Within a short period of time, you'll be a millionaire."

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