Fresh from bankruptcy, Northwest Airlines is now engaged in a bare-knuckles battle to retain its dominance on the important Twin Cities-to-New York route.
American Airlines, the world's largest carrier, will begin offering three daily nonstop flights between the Twin Cities and LaGuardia airport on Sept. 5.
To send an unmistakable message to American, Northwest announced Friday that it will start offering nonstop flights - on that same day - between LaGuardia and Dallas-Fort Worth, American's headquarters hub.
Neither American nor Northwest would comment Friday on that strategic move. But Twin Cities consumers likely will be the beneficiaries of the Big Apple skirmish. Also, Sun Country Airlines is still planning to expand its Twin Cities-New York schedule.
For fall travel, Twin Cities residents likely will see about 800 more seats a day available on direct routes to New York, with the big boost in seats meaning lower fares for some passengers.
Northwest, Continental and Sun Country airlines currently offer a combined 21 daily flights from the Twin Cities to LaGuardia, John F. Kennedy and Newark airports.
American's entry into that market will create a four-way competition for passengers.
Northwest, Continental, American and Sun Country expect to offer more than 3,400 seats per day on flights between the Twin Cities and New York this fall - about a 31 percent increase in available seats compared with the current total.
Northwest flew 64 percent of the passengers traveling between New York and the Twin Cities in the fourth quarter of last year. And it has so many flights that it will remain the No. 1 carrier on the route even after the American flights are added.
In addition, the Eagan-based carrier is bumping up the number of seats it markets on its direct flights to New York by 13 percent.
"We heard from our New York customers that Minneapolis is a growth market and a place where they'd like nonstop service," said Chuck Imhof, American's vice president of passenger sales for the New York area, in an interview earlier this week.
In particular, New York corporate clients and high-mileage business travelers want direct service to the Twin Cities, instead of connecting through Chicago's O'Hare airport, Imhof said.
Northwest, which has had 1,991 daily round-trip seats on that route, altered its fall schedule to add another 265 seats. That means Northwest will fly about two-thirds of the seats available on the Twin Cities-New York route. Northwest would not comment on its strategy, but its schedule shows that it has deployed larger Boeing 757-200s on the LaGuardia route to replace smaller Airbus A319s and A320s.
American plans to offer three daily flights on weekdays with MD80s that seat 136 total passengers and include first-class cabins with 16 seats. (It will operate a total of three flights on the weekends.)
`Still your hometown airline'
Bill Hochmuth, a senior research analyst at Thrivent Investment Management in Minneapolis, said that Northwest views American's move as "trying to steal market share." In response, he added, Northwest seems to be saying: "We are still your hometown airline. Now we offer you more seats at the times you want."
American's Imhof said Minneapolis-St. Paul will be the 26th destination that American serves nonstop from LaGuardia. He noted that American was successful in adding nonstop service from New York to Atlanta, even though Delta Air Lines is based there.
Hochmuth said that American may offer some low fares as it introduces its new nonstop service, but he does not anticipate an all-out fare war.
That's the kind of battle that Northwest previously has shown it's willing to wage to defend its Twin Cities hub. In April 2004, low-fare Frontier Airlines introduced two nonstop flights between the Twin Cities and Los Angeles. Northwest immediately slashed its fares to match Frontier's and added nonstop flights to Los Angeles that left at the same time as the Frontier flights. Some round-trip fares to L.A. dropped to $98.
Northwest management also fired a broadside at Frontier by initiating flights between Los Angeles and Denver, Frontier's hub. Within three months, Frontier decided to retreat from the contest.
But American is the world's No. 1 airline, with far more staying power than Frontier, and it already has a customer base of people who travel between New York and the Twin Cities.
"There are some very clear differences between us and somebody like Frontier," Imhof said. "What we are attempting to do is respond to what our corporate partners have asked us to do."
As of the fourth quarter of last year, Northwest was charging substantially more for tickets on the New York route than Sun Country Airlines. An average of 2,410 passengers traveled per day on the route during that period and the average one-way fare was $237, according to the U.S. Department of Transportation.
Northwest passengers paid an average of $251 one way, while Sun Country passengers paid an average of $138 one way, the federal report showed.
Mendota Heights-based Sun Country, which has about 11 percent of the Twin Cities-New York market, is adding two new airplanes over the next few months. The low-fare carrier now flies to Kennedy Airport twice daily with Boeing 737s.
Jay Salmen, Sun Country's CEO, said that his airline still "anticipates" that it will add a third flight to Kennedy when a new 737, seating 162 people, arrives in August.
Salmen said he is trying to lure customers with more than the lowest fare. Unlike Northwest and many other airlines, Sun Country serves hot sandwiches in coach.
"We treat people better than anybody else," Salmen said.
Liz Fedor - 612-673-7709
MORE FLIGHTS TO NEW YORK
By September, four airlines will be flying nonstop between the Twin Cities and New York-area airports. More than 3,400 seats per day - a 31 percent increase - will be offered to consumers.
American: three flights to LaGuardia
Continental: five flights to Newark
Northwest: 15 flights to LaGuardia, Newark and Kennedy
Sun Country: three flights to Kennedy
Source: Official Airline Guide, Sun Country
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