More options, lower fares for MSP fliers?

  • Article by: SUZANNE ZIEGLER , Star Tribune
  • Updated: February 28, 2009 - 11:53 PM

Southwest Airlines flights to Chicago's Midway Airport take off a week from today.

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A Southwest Airlines jet is shown on final approach at Lindberg Field in San Diego.

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Southwest Airlines arrives in the Twin Cities next Sunday with only eight flights a day to one airport, Chicago Midway.

But its entrance, long sought by airport executives and local travelers, sets the stage for a showdown between Southwest -- the self-proclaimed airline of low fares, no hidden fees and "Positively Outrageous Customer Service" -- and Northwest Airlines, which has a legendary reputation for how far it will go to defend its turf.

Still, Northwest may be more vulnerable than ever. Purchased by Delta in the fall, it can no longer claim to be the hometown airline. Protracted labor disputes have hurt its customer-service reputation. And like most major airlines, it has eliminated many amenities while adding new fees, leaving customers increasingly frustrated.

"Southwest just has that mentality that they can pull it off. They don't usually make mistakes on locations," said Dean Headley co-author of the closely watched Airline Quality Rating report. "They're like the McDonald's of air travel. McDonald's knows where the best corner is and they go get them."

Minneapolis travel expert Terry Trippler said Southwest has "created havoc" wherever it goes. In one industry study after another, the carrier's arrival is credited for increasing the total number of travelers at an airport and reducing overall fares -- often at the expense of established carriers.

But, Trippler said, Northwest is not going to roll over. "Everyone will win, especially the consumer," he said.

Trippler and others say most travelers will give Southwest a try but that long-term switching will come down to this: Will Northwest's popular WorldPerks rewards program and its vast flight options out of the Twin Cities be enough to keep them loyal? Or will Southwest's no-fee, no-frills flights win them over, even if it means connecting flights through Chicago?

Southwest is successful because of low fares, high marks for customer service and a simple philosophy that "gets people where they want to go with a little fun along the way," said Headley, a marketing professor at Wichita State University.

John Mitola, a frequent traveler between Chicago and Minneapolis, is glad Southwest is here. "They're a really friendly airline," said Mitola, who lives in Chicago but commutes to his job as president of Juhl Wind near Pipestone, Minn. "They make a point to either hire nice people or train them to be really nice."

The Southwest effect

Southwest has been a not-so- friendly aggressor when it comes to taking on other airlines, growing from scrappy low-fare carrier to the No. 1 airline for domestic travelers. Founded in 1971 serving three Texas cities, Southwest has muscled its way into numerous markets. Its top five airports now are: Las Vegas, Midway, Phoenix, Baltimore and Hobby in Houston.

Northwest has beaten back efforts by Frontier, Reno Air, Vanguard, AirTran and others to crack the Twin Cities market over the years. The battle with Frontier that ended months after it started in 2004 got so brutal that, at one point, both airlines had dropped round-trip fares to Los Angeles to $98.

Northwest has been accused of predatory pricing by some airlines, who charge that it floods routes with seats it loses money on until the competitive threat is defeated. Then it raises fares again.

Northwest dominates at Minneapolis-St. Paul Airport, where it leases 101 of the Lindbergh terminal's 117 gates and has about 230 daily departures. By comparison, United and American each have 14 daily departures from three gates.

A week from today, Southwest will begin service from one gate at the Humphrey Terminal to Midway Airport, offering eight daily flights each way. From Midway, passengers can connect to 47 other cities on 197 daily departures. Southwest's lowest one-way fare from Minneapolis to Midway is $44, excluding government fees. Northwest is matching it.

Northwest, for its part, downplays the competition. Spokesman Anthony Black said Northwest has 150 destinations out of the Twin Cities while Southwest has one.

"We compete aggressively with all carriers and look forward to the competition," he said.

But Trippler said he has already seen the impact of what's known as the Southwest Effect -- falling prices when Southwest enters a market.

On Friday, he compared one-way fares from Minneapolis to Detroit and found Southwest to be slightly higher -- $126 versus Northwest's $114, connecting through Chicago. But anyone wanting to fly nonstop on Northwest would pay a premium: $634 for a one-way ticket.

Fees vs. No Fees

For price-sensitive fliers, Southwest's "no hidden fees" could be an advantage.

Susan and George Crossley of Lake Delton, Wis., flew Northwest from Minneapolis to Phoenix last month and had to pay $160 to get their four bags back and forth. The older couple, instead of trying to manage one large bag each, decided to use two smaller ones. (They paid again on US Airways flights between Phoenix and Hawaii. Grand total to move their bags: $320.)

They thought it wasn't fair to charge for something that you need. "What vacation traveler is going to go without a suitcase?" asked Susan Crossley.

Many fees were added in 2008, when airlines were trying to compensate for soaring fuel prices. While many fuel surcharges have disappeared, other add-on fees haven't. Flying standby on Northwest, a service that not long ago was free, rose to $50 in December, from $25. Changing a flight costs $150.

Dawn Larson of Elk River said she was upset when the one-way fee to bring her 12-pound daschund, Hunter, on board Northwest rose from $80 to $150 after Delta took over. "I could almost buy a seat for the dog."

Fees have caused the travel industry to take a hit with consumers, said Jim Gaz, senior director of global hospitality, travel and entertainment for J.D. Power, which provides consumer ratings of airlines and other industries. "It gets to the nickel and diming," he said.

Labor strife

Concessions Northwest wrestled from workers in bankruptcy might also backfire against the airline in its fight with Southwest. In J.D. Power's most recent survey of airline quality, Southwest ranked second (behind JetBlue) while Northwest was 11th out of the 12 airlines rated. Northwest took hits for its flight crew, inflight services, cost and fees.

Because flight attendants are the face of the airline, Gaz said labor problems have a tendency to trickle down to the passenger. "If the staff has been hammered on with concessions ... that may not be a happy crew," he said.

Headley said he expects travelers to give Southwest a try. "Some people will stick with Northwest. Whenever you have the old favorite -- and they're under transition like Northwest is -- then you throw in the single most aggressive competitor you can probably find, it's a pretty good twist on things."

Suzanne Ziegler • 612-673-1707

  • related content

  • Southwest Airlines

  • COMPARING THE CHARGES

    Service: Northwest / Southwest

    First bag: $15 / free

    Second bag: $25 / free

    Carry-on pet: $150 / no pets

    Pet in cargo: $275 / no pets

    Flying standby: $50 / no fee*

    Change-ticket fee: $150 / no fee*

    Preferred seat: $15 to $35 / open seating**

    Snack charge: free*** / free

    Fuel surcharge: none / none

    Phone reservation: $20 / no fee

    Online reservation: free / free

    Ticket-counter purchase: $45-$55 / no fee

    *Customer will pay any difference in fare

    **Southwest has business-select option: pay $15-$30 more one way and be the first to board

    ***Additional food and beverages can be purchased

    Source: Northwest and Southwest

    Note: fees are one-way and for coach

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