Midwest Scores Big, Others Further Down In Rankings

<B>Midwest Scores Big, Others Further Down In Rankings</B>

By David Jonas

Scoring significantly higher than a year ago, Midwest Express Airlines topped the other smaller carriers in the survey and actually tied for first overall with United Airlines in the eyes of corporate travel buyers. Frontier Airlines finished fifth among buyers, while AirTran Airways and American Trans Air were at the bottom of the list.

The four smaller domestic carriers in this year's survey do not fit the U.S. Department of Transportation's criteria for major carrier status, and total usage among survey respondents ranged from 25 percent to 40 percent. Despite Midwest Express' strong showing, smaller and low-fare carriers generally have limited route networks and hefty competition from larger airlines makes corporate discounting a tough proposition.

Milwaukee-based Midwest Express' top ranking on the corporate side--including the highest scores in five of 10 categories--is a dramatic improvement from last year, when it finished 10th.

"It's all a matter of service," said Shaun Malay, director of corporate travel for New York Life Insurance Co. "Their inflight product is so darn good that people don't like to complain about sales efforts. It skews the perception."

However, the carrier gained visibility as it expanded service and opened new markets in the past 12 months, including Indianapolis and Des Moines, Iowa. "We are addressing the biggest complaint from travel managers that we don't fly to enough cities," said Jim Reichart, acting director of sales and marketing. "We are becoming more of a viable option for more business travelers."

Midwest Express also is progressing on its corporate sales program, though it has yet to define a strategy moving forward. Only a few corporations thus far have established discount agreements.

Chicago-based BancOne, however, is one, and national travel manager Winnie Cloran said the higher price is worth the service. "Also, the lack of bureaucracy means that frontline employees are encouraged to handle problems because they know their customers are frequent travelers," she said.

Indeed, buyers gave the carrier a 3.63 in the complaint/problem resolution category, 23 percent above the industry average and well above last year's 3.09 figure. That perception may be due, in part, to the carrier's recent customer recovery toolkit program, which allows customer service reps to quickly deal with problems on the spot at gate areas. The toolkit contains flight coupons and complimentary roundtrip tickets, if warranted.

Other areas where Midwest Express scored tops among buyers included flexibility in negotiating group pricing and empowerment of sales reps. "Part of the advantage of being a small company is that there are not a lot of layers and account managers can talk directly to revenue management, for example," Reichart said. "As for groups, conventions and meetings, which all fall under the same umbrella, we have been heavily promoting our more liberal policy of eight people qualifying as a group. At most other airlines, it's 10 or more."

Travel agents ranked Midwest Express 10th and below the industry average in most categories, dragging the carrier down to an overall ranking of fifth.

Denver-based Frontier Airlines, while dipping from 10th to 11th overall, finished fifth among corporate buyers. In fact, its 3.46 mark from those respondents in flexibility in negotiating transient pricing was tops of all airlines and nearly 12 percent above the industry average. The carrier attributed its success to empowering sales managers to negotiate directly with clients and its philosophy "not to place onerous QSI market share requirements on corporate travel departments, like the majors do." Indeed, buyers ranked Frontier third in sales rep empowerment.

"We do hear from some clients that Frontier really is trying hard," said John Heilner, a consultant with Management Alternatives/MSIG in Princeton, N.J. "They seem to be more flexible with corporate arrangements."

Buyers also scored Frontier's overall price value at 3.63, 15 percent ahead of the industry average and second only to Southwest. To that point, Frontier said its corporate discounts equate to 50 percent savings compared with published fares at major airlines.

However, buyers gave poor scores in availability of special services to VIP travelers--the carrier offers one class of service and therefore does not upgrade--and in quality of communication and quality of sales rep visits.

While showing improvement on the corporate side, Frontier continues to falter with agencies. Respondents ranked the carrier 12th. Frontier cited its small staff--just six salespeople who focus primarily on corporate clients--and avoidance of override programs. In fact, the 1.10 score from agent respondents in quality of sales rep visits is the lowest score for any carrier in any category.

Orlando-based AirTran Airways ranked 13th overall, matching last year's performance. However, like last year, the carrier placed in the top three in overall price value. Among corporate respondents, AirTran also placed 13th, with a last place score in negotiating group pricing. Agents placed AirTran at the very bottom of the list, with last place scores in six of 10 categories.

American Trans Air again finished in the basement as a result of minimal corporate sales efforts. The carrier, however, is transitioning to more of a business airline and has begun approaching corporate travel managers.

ATA's new strategy of attracting business travelers was not reflected in the survey as the total corporate respondent base, of which only 18 percent reported usage, gave it the lowest scores in seven categories. Its overall weighted score was more than 30 percent below the industry average.