Midwest Air to Cut Flights

By John Welbes, Pioneer Press, St. Paul, Minn.

Jul. 22–Troubled by tough economic conditions and needing to reduce costs, Midwest Airlines said Monday it’s cutting service to some cities and eliminating nonstop flights to others.

At the same time, the Milwaukee-based carrier will expand its code-share agreement with Northwest Airlines by more than 100 new city pairs.

Midwest will maintain flights between Minneapolis-St. Paul International Airport and Milwaukee. The flights being eliminated will pull Midwest’s total number of daily departures out of Milwaukee down from 118 to 90.

Eagan-based Northwest, the dominant Twin Cities carrier, owns 47 percent of Midwest.

The code-sharing plan has been in the works for months, said Randall Smith, Midwest’s vice president of sales and distribution. It began with Midwest flights that went to the West Coast, with passengers continuing on Northwest flights to Hawaii. The two airlines also have a number of code shares out of Indianapolis.

Code sharing allows the two airlines to sell seats and use their own separate flight numbers on the same flight. Midwest’s expanded code sharing will allow its passengers to fly into Northwest hubs and then continue on to many destinations served by Northwest, Smith said.

The new city pairs being added to the agreement "do allow us to re-accommodate some people" who would have been flying Midwest routes that are being cut, Smith said. But Midwest has to be careful, he said, because Northwest also is reducing its flight capacity this

fall.

"We don’t want to raise expectations for people that we’ll be able to find a seat in every case," he said.

The expanded code sharing will necessitate some changes at Minneapolis-St. Paul airport, Smith said. Since 2003, Midwest has flown into the airport’s smaller Humphrey Terminal. Now that more of its passengers will likely be connecting to Northwest flights, Midwest will try to move back to the main Lindbergh Terminal, where Northwest operates, he said.

Midwest CEO Tim Hoeksema said the airline still will serve major business destinations with more nonstops from Milwaukee than any other airline. The carrier is dropping nonstops between Milwaukee and Los Angeles, San Francisco and Seattle. Those flights will now go through Midwest’s hub in Kansas City, Mo. Airports Midwest will stop serving in September include San Diego, Fort Lauderdale, Fla., and Fort Myers, Fla.

The flight schedule changes announced Monday will start taking effect Sept. 8.

Monday’s code-sharing news didn’t bring comfort to Midwest employees, who already are bracing for big layoffs and pay cuts. Those looming reductions were announced earlier this month.

"They’re laying off half the pilots and trying to get huge pay cuts from those remaining," said Greg Uselmann, a Midwest pilot and vice chairman of the pilot’s union at the airline.

As the airline industry continues to feel pressure from rising jet fuel prices and broader economic concerns, budget trimming is the norm. A week ago, Midwest and its Skyway subsidiary announced they would cut 40 percent of their employees, or 1,200 positions. Most of the jobs are tied to the airline’s announcement to remove its fleet of 12 MD-80 jets from service this fall.

Last year, TPG Capital, a private equity firm, teamed with Northwest Airlines to buy Midwest. Northwest invested $213 million in Midwest’s parent company for its 47 percent stake. The deal passed antitrust review, was finalized in late January, and Northwest is considered a passive investor.

But even as the deal was wrapping up, crude oil prices began spiking and turning the airline industry’s finances upside down.

As the nation’s airlines continue to park planes and cut flights, Uselmann said Midwest employees are watching to see what their partial owner — Northwest — will do after it merges with Delta Air Lines of Atlanta later this year.

"We’ve been trying to develop a plan going forward with how we fit into the Northwest system and the Delta system," Uselmann said. "We’re kind of going without a rudder right now."

Systemwide, the flight reductions will leave Midwest and its affiliate, Midwest Connect, with 102 daily departures, down from 138.

At least one nonstop route Midwest plans to eliminate already has new service. Northwest announced Monday it will start nonstop service between Milwaukee and Los Angeles on Sept. 6.

John Welbes can be reached at 651-228-2175.

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