Amtran to Challenge AirTran and Northwest at Minneapolis-St. Paul International Airport

Strategic Insights -

The sudden interest of two low-fare carriers, AirTran Airways and Amtran Inc., in the route from Minneapolis-St. Paul International Airport to Chicago's Midway Airport has sparked attention in the national aviation market. This development comes despite the route already being heavily served by Northwest Airlines and low-fare Vanguard Airlines. The entry of Amtran, an Indianapolis-based carrier, and AirTran may bring downward pressure on fares, with Amtran's President, Douglas Abbey, citing the airline's "very astute" business strategy. The Metropolitan Airports Commission (MAC) is currently negotiating with Amtran to accommodate the carrier at the airport.

Key Takeaways:

  • Amtran Inc. is in negotiation with the Metropolitan Airports Commission to offer daily service from Minneapolis-St. Paul International Airport to Chicago's Midway Airport.
  • AirTran Airways has already secured Gate 41 at Minneapolis-St. Paul International Airport for its June 10 launch of four daily flights to Chicago-Midway.
  • The MAC must forfeit Gate 46 to accommodate Amtran, which is expected to be an American Trans Air (ATA) aircraft.
  • The new service by Amtran's American Trans Air plans to stimulate additional traffic on the route by undercutting incumbents' fares and offering friendly and innovative service on new Boeing 717s.
  • The airline hopes to stimulate additional traffic on the route and may add nonstop service to its major hub in Atlanta.
  • ATA's product will differ from the service provided by AirTran and Vanguard because Midway is a connecting hub for ATA, with over 25 destinations available as non-stop flights.
  • Northwest and Vanguard are expected to match the lower fares to Midway, at least on certain flights.

Statistics:

  • Over 3,200 daily passengers travel between Minneapolis-St. Paul and Chicago airports (too large source).
  • 52.7% market share of flights serving Chicago from Minneapolis-St. Paul held by Northwest Airlines.
  • AirTran plans to add 468 airplane seats a day to Midway airport.
  • Amtran's American Trans Air plans to operate more than 25 non-stop destinations from Midway to destinations such as Philadelphia, San Francisco, Dallas, and Seattle.

Sources:

  • The Washington Post, Washington D.C., [no date or publication date]
  • U.S. Transportation Department Report, [no date or publication date]