Business History Books » Business Plans » MIDWAY LEAVES CHICAGO 2/28/95
MIDWAY LEAVES CHICAGO 2/28/95
Question:
A Midway Airlines reservations agent just confirmed my suspicions that Midway will end *all* service at Chicago Midway Airport after February 28. The agent hedged a bit at first but *did* say that they have been instructed not to give any information or accept reservations for any flights from Chicago after 2/28/95. Then I asked him if this was because the airline was moving to Raleigh, and after some hesitation he said yes. When I asked if Midway was ending all Chicago service he again said yes. He sounded rather uspest about the whole mess, and when I said I supposed things were pretty awful there right now (due to the upheaval) he said "yes, it is". One would *think* that the routes from Midway to La Guardia, Washington National, Denver, Dallas and Philadelphia would be strong. And after the demise of the original Midway Airlines a few years ago, United, USAir and American moved into all of these routes. And after a few months they abandoned each of those routes. Midway will probably use their current LGA landing slots for Raleigh flights. Midway ended their Chicago-Washington flights last year, but if they still have access to landing rights there I suspect they’ll use those for RDU flights as well. This is really ominous for Midway Airport in my opinion. If the big boys couldn’t make money on key medium and longer hauls, and now a serious upstart airline also cannot, will we ever again see that sort of service at Midway? Or will it always pretty much be overrun with tons of flights to only a dozen so cities? Dale Milwaukee
Response:
> This is really ominous for Midway Airport in my opinion. If the big boys > couldn’t make money on key medium and longer hauls, and now a serious > upstart airline also cannot, will we ever again see that sort of service at > Midway? Or will it always pretty much be overrun with tons of flights to > only a dozen so cities?
I don’t see that that will hurt all the low-cost airlines flying out of MDW. Unlike most of the others there, Midway Airlines was trying to compete directly against AA’s and UA’s ORD operations into slot-controlled airports like LGA. At the time they began flying, several posters cited routes like MDW-LGA as the reason Midway Airlines wouldn’t last for very long. — Coordinated Science Laboratory University of Illinois at Urbana-Champaign
Response:
: > This is really ominous for Midway Airport in my opinion. If the big boys : > couldn’t make money on key medium and longer hauls, and now a serious : > upstart airline also cannot, will we ever again see that sort of service at : > Midway? Or will it always pretty much be overrun with tons of flights to : > only a dozen so cities? Blame the CIty of Chicago if you want to — they let Midway fall apart with only a few cosmetic changes up until the point that Midway went out of business the first time. Once the new subway line (service to downtown) was built, there was some renewed interest in revitalizing MDW, but too little too late. Besides, a business traveler won’t take the subway. The lack of a fast way to get to/from MDW by cab from downtown is what makes it unattractive. Like it or not, at least there is freeway access to O’Hare. Not to mention nicer facilities… The lack of major carrier presence at MDW made it attractive for the new low cost carriers (Private Jet/National, Kiwi) as well as the established low cost carriers (Southwest, ATA). Despite a presence of CO, TW and HP, the airport was primarily targeted at a low yield-high volume audience. This was another blow to the airport, ’cause the low cost carriers won’t spend their own money to make facility improvements (which both AA and UA did in the late 80’s at ORD), and the City didn’t have the money either. IMHO, the high yield business travelers were less willing to fly out of MDW because of that "low-cost" image, just as they do at other secondary airports -not- served by the Big Three. Just like EWR and OAK became forgotten children, so was MDW. The other two rebounded. MDW hasn’t. : I don’t see that that will hurt all the low-cost airlines flying out : of MDW. Unlike most of the others there, Midway Airlines was trying : to compete directly against AA’s and UA’s ORD operations into : slot-controlled airports like LGA. So does Kiwi in the MDW-EWR market, and Southwest in the DTW and STL markets. MDW did OK on the LGA-MDW market from what I hear, and I wouldn’t be surprised to see that remain or come back at a later date once they can figure out how to make the schedule at RDU work. It is hard -not- to compete against the Big Three these days. All the cash rich routes are served by UA/DL/AA, and the new guys want a piece of the action. If it is a matter of two carriers at the same airport, even I’d pick the lower cost carrier. But when the airports are different, I’ll pick what I feel is the most convenient. E — | "Views expressed here do not represent the airline that I work for! |
Response:
>It is hard -not- to compete against the Big Three these days. All the >cash rich routes are served by UA/DL/AA, and the new guys want a piece of >the action. If it is a matter of two carriers at the same airport, even >I’d pick the lower cost carrier. But when the airports are different, >I’ll pick what I feel is the most convenient.
Southwest’s success in the Bay Area, while lacking a strong SFO presence, probably has a lot to do with the location of the three airports — for the majority of residents in the Bay Area, Oakland or San Jose airports are as close or closer than SFO. SFO thrives due to the 17 million visitors to San Francisco, and its international dominance, more than its prime location relative to the majority of the population of the area.
Response:
: IMHO, the high yield business travelers were less willing to fly out of MDW : because of that "low-cost" image, just as they do at other secondary : airports -not- served by the Big Three. Just like EWR and OAK became : forgotten children, so was MDW. The other two rebounded. MDW hasn’t. I disagree with Eric’s opinion about Midway’s attractiveness to business travelers. The DTW-Chicago route is a high-volume route served by UA, AA, NW and Southwest. I and a number of business people I know fly the route at least once a week. The consensus preference is to fly to MDW if you’re going to the Loop and fly to ORD if you’re going to the northwest suburbs — Schauburg, Hoffman Estates, etc. From this unscientific survey, it seems that MDW is hurt more by the move of companies like Sears and Ameritech to the northwest suburbs than anything else. Mark Peacock Birmingham, MI
Response:
: : IMHO, the high yield business travelers were less willing to fly out of MDW : : because of that "low-cost" image, just as they do at other secondary : : airports -not- served by the Big Three. Just like EWR and OAK became : : forgotten children, so was MDW. The other two rebounded. MDW hasn’t. : I disagree with Eric’s opinion about Midway’s attractiveness to business : travelers. The DTW-Chicago route is a high-volume route served by UA, : AA, NW and Southwest. I and a number of business people I know fly the : route at least once a week. The consensus preference is to fly to MDW if : you’re going to the Loop and fly to ORD if you’re going to the northwest : suburbs — Schauburg, Hoffman Estates, etc. The statement was not business people, but high yield business people i.e. full fare (or as close as it gets these days!) coach and First Class. High yield has nothing to do with high volume. I don’t dispute the fact that some business people choose to fly out of MDW, but having dealt with both airports (and getting to/from both airports…) as both a passenger and employee, I stand by my remarks. MDW has become the forgotten child of the Chicago Dept. of Aviation. The influx of low cost carriers will not help that image problem, nor will it create enough of a revenue draw for the carriers to be able to afford the improvements that the airport desperately needs. : From this unscientific survey, it seems that MDW is hurt more by the move of : companies like Sears and Ameritech to the northwest suburbs than anything : else. Who ever said that business was scientific?…. No doubt that the boom in the Northwest Suburbs but also the West Suburbs (Oakbrook) along the I-355 corridor is drawing people to ORD vs. MDW. E — | "Views expressed here do not represent the airline that I work for! |
Response:
>I don’t dispute the fact that some business people choose to fly out >of MDW, but having dealt with both airports (and getting to/from both >airports…) as both a passenger and employee, I stand by my remarks. >MDW has become the forgotten child of the Chicago Dept. of Aviation. >The influx of low cost carriers will not help that image problem, nor >will it create enough of a revenue draw for the carriers to be able to >afford the improvements that the airport desperately needs.
I thought Chicago had recently announced plans for a new terminal at MDW, to be built on land between the current terminal and where the Subway station is? RNA
Response:
>I thought Chicago had recently announced plans for a new terminal at >MDW, to be built on land between the current terminal and where the >Subway station is? >RNA
Yes, an initial design for a new terminal is up and running, I believe. Mayor Richard Daley had a news conference some time late last year to announce the plan. However, the terminal (which will probably be built, I hope) will obviously be at least a few years away from opening. From what I read and heard, the terminal will be a basic no-frills building designed to handle the explosive growth that’s come to Midway. Midway AIRLINES (the new one), however was launched as a business-oriented carrier, which is quite different from the Southwests, Continental Lites, and ValueJets of this world that have descended upon Midway Airport. In other words, the terminal that’ll be build will be too little, too late for Midway Airlines. I wish them luck at RDU, but it is a great disappointment to see the go, especially because they serve markets the other discount carriers wouldn’t touch with a ten-foot pole. Mihir Shah
Response:
: >I don’t dispute the fact that some business people choose to fly out : >of MDW, but having dealt with both airports (and getting to/from both : >airports…) as both a passenger and employee, I stand by my remarks. : >MDW has become the forgotten child of the Chicago Dept. of Aviation. : >The influx of low cost carriers will not help that image problem, nor : >will it create enough of a revenue draw for the carriers to be able to : >afford the improvements that the airport desperately needs. : I thought Chicago had recently announced plans for a new terminal at : MDW, to be built on land between the current terminal and where the : Subway station is? They have. They planned to move Cicero Avenue in the process, but I’m not too sure what will happen to that plan now that one of the two major tenants has moved out…. The City can go through with the new terminal, but without tenants to pay the bill, is it financially justified? E — | "Views expressed here do not represent the airline that I work for! |
Response:
- Hide quoted text — Show quoted text – >: >I don’t dispute the fact that some business people choose to fly out >: >of MDW, but having dealt with both airports (and getting to/from both >: >airports…) as both a passenger and employee, I stand by my remarks. >: >MDW has become the forgotten child of the Chicago Dept. of Aviation. >: >The influx of low cost carriers will not help that image problem, nor >: >will it create enough of a revenue draw for the carriers to be able to >: >afford the improvements that the airport desperately needs. >: I thought Chicago had recently announced plans for a new terminal at >: MDW, to be built on land between the current terminal and where the >: Subway station is? >They have. They planned to move Cicero Avenue in the process, but I’m not >too sure what will happen to that plan now that one of the two major >tenants has moved out…. The City can go through with the new terminal, >but without tenants to pay the bill, is it financially justified?
I think so. Traffic for 1993 at MDW was 6.757 million, and little of that was Midway Airlines. Figure a PFC income of some $20 million/year—you can build a pretty nice terminal for that. So long as you have passenger flow you don’t need to rely on airline leases. RNA (I don’t understand why they’d need to move Cicero. Surely they could route it under the new construction? Or even have the passenger side of the terminal on one side and put the airside on ther other side of the road?