Midwest Airlines is altering its basic product strategy in a bid to increase revenues as it tries to evade a hostile takeover bid from AirTran Airways.
The Milwaukee-based carrier is reconfiguring its 25 Boeing 717s to make room for 11 more seats. Midwest is famous for two-by-two seating throughout its mainline fleet. It will keep 40 of the existing seats, but will remove the remaining 48 in favour of 59 smaller seats in a two-by-three configuration.
Midwest since 2003 has been operating a separate all-economy low-fares operation known as Saver Service using its Boeing MD-80s. The carrier will now reconfigure its MD-80s to add 12 wider seats in two-by-two configuration. All 147 seats in its MD-80s are now in two-by-three configuration and 132 of these will remain. Midwest has 11 MD-80s but is studying potential replacements.
Scott Dickson, Midwest's senior vice- president and chief of marketing, insists "we are not creating a business-class cabin. We are offering choice of seats within the same cabin. All other service will remain the same for everybody no matter where you sit." This includes its trademark fresh-baked cookies.
Midwest chief executive Tim Hoeksema calls the move "a very efficient, very effective way to grow the airline at a very, very nominal cost". He says the changes will increase capacity by about 12.5%. He estimates incremental annual revenues of as much as $35 million, including $10 million from an expected higher load factor. Midwest has not detailed the price difference between its "saver" and "signature" seats.
Orlando-based AirTran Airways derided the Midwest changes as "imitation, the sincerest form of flattery". The carrier has made a cash-and-stock offer worth $389 million for Midwest, which has repeatedly rebuffed it. The deadline on its offer is now August.
Source: Airline Business
