<B> Midwest Express Soars</B>
By David Jonas
With a new corporate discounting program, a revamped sales force and a strong focus on emerging distribution options, Midwest Express Airlines is giving buyers more reason to work with an airline long known for excellent inflight service.
To go along with a completely restructured sales organization, Midwest Express in the past year introduced corporate discounts to about a dozen of its larger volume accounts. According to Lisa Bauer, outgoing executive vice president of sales and distribution, the carrier primarily has been entering into net fare agreements with such corporations as General Electric, Johnson Controls, Rockwell, Sprint, and of course, Kimberly-Clark, the company that spawned the airline.
"We were on board at the start for corporate discounting, and were able to establish one of the few net-net deals with them," said Winnie Cloran, national travel manager at BancOne in Columbus, Ohio.
Bauer, who soon will head for new challenges as senior vice president of marketing, sales and customer service at startup Legend Airlines, said Midwest Express's larger route network has opened new opportunities for buyers. "Since we have been growing and offering more destinations, we have expanded our contracts, which all are systemwide," she said. "Therefore, we expect, and have been receiving, larger volumes from our corporate accounts." In the past, some corporations may have been reluctant to negotiate with Midwest Express because they did not want to sacrifice a deal with another carrier. Now that Midwest Express has expanded to include more key city pairs, however, those corporations can come back and strike a deal. New routes include Milwaukee-Washington Dulles, which began Sept. 1, and Milwaukee-Pittsburgh, scheduled for Nov. 1.
Although volume discounting still is relatively new at Midwest Express, Bauer said some corporate accounts already have received an increased discount level as they make good on contract goals. However, more so than larger airlines with the ability to overlook some contract failures, Midwest Express will lower discounts and even pull contracts as soon as accounts fall short.
One travel manager who uses Midwest Express, speaking on the condition of anonymity, said, "They hold your ties to the fire more than other airlines. If they set specific city-pair deals, you better be sure you stick to it." However, that travel manager added that the goals usually are realistic and attainable.
Like so many of its larger counterparts, Midwest Express recently developed a new strategic initiative to reduce distribution costs. "We are aggressively looking at direct links with corporations," Bauer said. "By next year, we should be ready to go with Extranet connections from corporate intranets to our booking site, with their corporate policies included as one of the key elements." Meanwhile, the airline has been responding to concerns raised by travel managers in BTN's 1998 annual airline survey (<I>BTN</I>, Nov. 2, 1998). For example, the carrier scored low in the quantity and quality of sales representative visits category.
"We recognized that our sales force was spread pretty thin," Bauer said. "As a result, late last year we restructured the team by focusing our field salespeople on our top accounts and creating a sales program for smaller accounts so they each had a dedicated sales rep." The carrier also developed a new national account program and added an agency relations manager.
Another area where Midwest Express has scored particularly low is the availability of timely and accurate flown revenue data. That poor performance is due, in part, to the simple fact that the cost of MIDT data is prohibitive for a carrier that size. The solution is the purchase of select MIDT data--highlighting only certain city pairs--a program that Sabre will beta test with Midwest Express in the coming months. The carrier hopes other GDSs will follow Sabre in developing such products.
"MIDT data is somewhat of a concern with the smaller carriers that don't have access to such data," said Cloran. "It would certainly benefit Midwest Express to get that data in order to manage their accounts even better."
Meanwhile, the carrier also is leveraging the flexibility of regional jets. As the launch customer for the new 32-seat Dornier 328, Midwest Express will introduce RJs on its newest route, Milwaukee-Pittsburgh. Five of the planes will be added to the fleet by year-end, with 10 more on order.
"The new regional jet is ideal for the Pittsburgh-Milwaukee flights," Bauer said. "And in general, RJs allow us to put the appropriate amount of seats in each market." However, Bauer acknowledged that expansion of regional jets in other fleets has infringed on Midwest Express operations by reducing the number of markets where the carrier provides the only nonstop service. For example, US Airways Express recently brought RJs to the Milwaukee-Philadelphia route and US Airways' MetroJet recently launched Milwaukee-Washington Dulles service. "It is certainly a concern when low-cost carriers come into these markets with much lower fares," Bauer acknowledged.
Nevertheless, "the introduction of regional jets is a big development for Midwest Express," added Michael Hall, travel manager at Johnson Controls in Milwaukee. "It gives them a more consistent product and lends credibility to the airline." Meanwhile, the carrier plans to acquire four additional MD-80 jets, which will be used to increase capacity in some markets and open others.
On the service side, Midwest Express travelers soon will benefit from the convenience of self-ticketing machines. Though the carrier has yet to begin beta testing, it expects to roll out the devices next year to its hubs in Kansas City, Milwaukee and Omaha, as well as other key airports such as New York LaGuardia.
Other improvements include new flight information displays in Milwaukee, ramp monitors targeted at boosting on-time performance and the development of a centralized database that will get customers the most updated flight information, regardless of the channel. These improvements will enhance Midwest Express' reputation for high-touch, high-quality service.
"Because of the volume we give them, they know our employees, right down to the gate agents," Cloran said. "I truly believe they provide the best care in the air.