The Future of Milwaukee’s Airport

For General Mitchell International Airport and the citizens of the Milwaukee-area, 2009 will certainly be a year to remember.  Discussions came and went on the privatization of the airport as a means to bailout the poor fiscal position of Milwaukee County.  Hometown airline Midwest Airlines changed hands for a second time, this time to Republic Airways, a company that will certainly operate the business in a much different fashion than Midwest traditionally has run.  And finally, Southwest Airlines started service at the airport, triggering a pricing war with low-cost rival AirTran.

Airport Privatization

The issue of airport privatization came and went quickly.  The idea was initially publicly floated by County Executive Scott Walker. Since nothing really changed as a result of the debate, I’ll spare breaking down the gory details.  The premise of the idea of privatizing the airport is such.

1. The airport generates a profit for Milwaukee County.
2. Milwaukee County is in bad fiscal shape.
3. Leasing the profitable airport for 99 years would result in a windfall of cash that could be used to pay down county debts.

Obviously, anytime the government is looking at giving away a profitable asset, considerable debate must be had.  A lack of political will on the part of Scott Walker, and substantial opposition to the idea ultimately tabled the idea for now.

Midwest Airlines

The fall of Midwest Airlines has taken the form of a three-stage play.  The first stage was the acquisition attempt by AirTran, and the eventual buyout by TPG.  The second stage featured TPG writing down the value of the airline as a total loss.  We’re now just into the third stage, where the airline has been acquired by Republic Airways, who will almost certainly transform the remaining pieces of the airline into a low-cost carrier.  For the many employees of Midwest, I don’t know that the play has a happy ending.

My bet on the last remaining “best care in the air” feature of Midwest Airlines has to be the cookies by the time Republic Airways is done.

For the residents of Milwaukee though, there is a silver lining to be found in the fall of Midwest.  Midwest has been a good corporate citizen, paying for naming rights to civic institutions such as the Midwest Airlines Convention Center and sponsoring teams like the Brewers and Bucks.  Those contributions, as well as the countless bits of small support they give, are certainly of benefit to the community.  But how did Midwest pay for those contributions?

One could guess the community support might have largely come on the back of passengers flying in and out of General Mitchell, where Midwest held nearly a monopoly on service until recently.

So while it’s certainly unfortunate to lose a Milwaukee-company, it’s quite likely that Milwaukee will benefit from the intense competition between low-cost carriers that will reduce costs for travelers.

Southwest Airlines

Southwest Airlines began service from Milwaukee on November 1st, 2009.  The low-cost, no-frills airline had announced their Milwaukee expansion on May 20th, and began advertising in the area shortly thereafter.  Southwest Airlines is already serving as direct competition to AirTran, triggering the heralded “Southwest Effect” before the airline’s first flight from General Mitchell.

Southwest’s arrival in Milwaukee hasn’t been a secret.  They threw a party on the lakefront, bought a bunch of advertisements on the side of MCTS buses, and have placed ads with numerous other outlets in town.  This has triggered a response from AirTran, who this year bought the naming rights to the field-level club at Miller Park as well as numerous other placements in outlets around town.  The local economy is certainly benefiting from the shot in the arm from Southwest and AirTran’s advertising budgets.

The Future

While the days of Midwest Airlines delivering “the best care in the air” are likely behind us, the lowest prices in the region lie ahead.  The competition between Southwest and AirTran will result in the previously mentioned “Southwest Effect”.  The “Southwest Effect” will bring not only reduced fares to Milwaukeeans, but will make General Mitchell a more attractive place to fly out of for residents of Northern Illinois, the Fox Valley, and Dane County.

Statistically speaking, things are already looking up.  Fares for the second quarter of 2009 were about $44 less on average than at O’Hare, and $26 less than the national average.  September saw record traffic at Mitchell, with 648,779 passengers crossing through the gates, up from the previous record of 597,102 in September of 2007.

Industry experts believe that the recent entrance of Southwest has already lowered fares in the months leading up to their entrance.

AirTran also announced a large expansion today, in partnership with Skywest.  Adding service to four new destinations, and expanding the number of flights (but shrinking the size of the planes) to three other destinations.

The increased competition, in addition to new destinations and more frequent flights already is good news for Milwaukee as it’s likely to bring more travelers to the area as well as reduce costs for Milwaukeeans looking to get elsewhere for business or pleasure.  But add to that the expansion of feeder systems to the airport, including the purchase of new railcars for the Hiawatha line that drops Chicagoan’s at the airport (or downtown) and the potential for the expansion of the Hiawatha route to Madison via stimulus funds, and you have a recipe for success.

They compete, we win.