MSP Airport / Metropolitan Airports Commission

[SteveXC500]

HOU would provide International, while DAL would not. However, one flight per day to each would be an excellent addition to the SW network. The customer base may not be overly strong in Minneapolis, but in each of the HOU/DAL markets, SW is enormous. Much of their loyal base would likely fly here as well and could be supportive of those flights, when made available.
I feel like the BWI add is good and I was surprised at it being twice daily, but it will provide nice east coast and Caribbean connectivity.

[HiawathaGuy]

HOU would provide International, while DAL would not. However, one flight per day to each would be an excellent addition to the SW network. The customer base may not be overly strong in Minneapolis, but in each of the HOU/DAL markets, SW is enormous. Much of their loyal base would likely fly here as well and could be supportive of those flights, when made available.
I feel like the BWI add is good and I was surprised at it being twice daily, but it will provide nice east coast and Caribbean connectivity.

I mean, seriously. How can SW not want to grow here?! Midway is so jam-packed that this literally makes total sense for them. They have their own terminal, with room to grow! I mean - Milwaukee?! I hope SW keeps adding here - so Delta can feel the squeeze for a change.

[Wedgeguy]

I'm pretty sure that with IcelandAir you get time to layover (Few days even) in Iceland before you have to travel onward to Europe. Would the Delta Alliance do that as well. That is part of their tourism package for the country. Lots of people spend a few days in Iceland and spend some serious money there before traveling on. The Icelandic government will not allow Delta to get a monopoly that screws them out of those tourist dollars. Iceland will look out for Iceland Air.

[Nathan]

Last time I did a stopover in Iceland it was up to 7 days, I did 4. So amazing. Best feature an airline could do.

[Tyler]

I'd guess the intention is simply, cynically, to make the MSP-KEF leg unprofitable for Icelandair, to reduce competition in our market. Since very little demand exists for flights to Reykjavik, the only thing driving MSP-KEF is connections on to Europe, which are significantly cheaper on Icelandair than on Delta, AF, or KLM. They can drive up Icelandair's costs by producing redundancy in the MSP-KEF market, which then unbalances the supply / demand for KEF-Europe flights since they're no longer tightly bound with the US-KEF flights. This goofs up the massive efficiency Icelandair's highly-symmetrical service model allows.

I don't understand this logic. Higher demand for KEF-Europe flights would only help IcelandAir.

[amiller92]

I don't understand this logic. Higher demand for KEF-Europe flights would only help IcelandAir.

Where is the higher demand coming from?

I guess I'd assume demand will be unchanged (assuming that Delta won't have connecting flights on to Europe) and what's happening is Delta adding supply to MSP-KEF. That means either (1) Delta thinks there is enough demand for flights to KEF that it can be profitable flying that route, or (2) Delta hopes that peeling off some of Icelandair's KEF passengers will make it harder for Icelandair to be profitable flying out of MSP, potentially causing them to pull back or pull out entirely.

In the short run, it should mean some nice competition on airfares to KEF.

[FISHMANPET]

But since the vast majority of people are just laying over in Iceland (though for up to 7 days, it's still not their destination) there's very little actual traffic MSP-KEF. It's just a weird thing to me.

[Tyler]

Where is the higher demand coming from?

If I'm reading Tom's post correctly -- from the passengers on the Delta flight trying to get to Europe. But I don't think that will be common. And Iceland air would benefit anyhow.

But since the vast majority of people are just laying over in Iceland (though for up to 7 days, it's still not their destination) there's very little actual traffic MSP-KEF. It's just a weird thing to me.

Right. In my opinion this route cannot simply be a punitive measure against IcelandAir. It doesn't address the bulk of that traffic in a meaningful way.

FWIW, they requested the slot for MSP-KEF along with JFK-KEF for summer 2015 and were denied.

[amiller92]

Right. In my opinion this route cannot simply be a punitive measure against IcelandAir. It doesn't address the bulk of that traffic in a meaningful way.

It doesn't need to address the bulk of the traffic. Just a few passengers per flights really could change the economics quite a bit. If Icelandair needs to operate with $2-5k less in revenue per flight, do its numbers still work? Does it still want to expand?

Anyway, it's all speculation. We'll have to see what happens.

[MSPtoMKE]

It is weird. Apparently, traffic at KEF has been growing at a very high rate, however. On airliners.net, someone mentioned that traffic is up something like 25% over last year, and there are a bunch of other new flights launching next year. So it could be that Iceland is growing as a tourist attraction, but it just doesn't seem sustainable to me. According to KEF's wikipedia page, the only other North American airports with service from more than one airline are JFK, BOS, Montreal and Toronto. I have a hard time seeing both of these flights lasting. Icelandair seems to have the better business plan with connections onto Europe vs. Delta connecting people from the midwest and west coast to Iceland. However, Delta does have deeper pockets to stick with a money loosing flight. I wouldn't be surprised if, at the least, Icelandair decided to redeploy the 767 to another market.

[FISHMANPET]

You'd think at some point if Delta flights threaten Icelandair's model that KEF would pull their slots or something. Isn't IcelandAir a flag carrier and so Iceland has a non zero amount of involvement? At the very least hurting IcelandAir hurts KEF, so they have an incentive to act to protect IcelandAir.

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[Tyler]

Delta will be flying two 757's a day seasonally to KEF. It's not exactly a shot across the bow. And KEF might like the competition anyhow.

[Wedgeguy]

You'd think at some point if Delta flights threaten Icelandair's model that KEF would pull their slots or something. Isn't IcelandAir a flag carrier and so Iceland has a non zero amount of involvement? At the very least hurting IcelandAir hurts KEF, so they have an incentive to act to protect IcelandAir.

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I'm with you. IF Delta tried to scrub competition , they may find themselves with out a gate, if the airport government decides Delta is hurting IA. They are not the Delta friendly MPLS airport commission. They have their own interests to look out for. They are not worried about Delta in the least. They can cut them off if they feel the need to. I would hope Delta is smart enough to know that.

[Didier]

It's hard to imagine that an MSP-KEF-Europe flight would be cheaper or even easier on Delta.

Icelandair offers has three key selling points that Delta can't match:
• Budget flights
• Lots of European connections
• Free extended layover

So, assuming Delta's prices will be competitive, still the only real benefits are slightly better service and SkyMiles, no?

(I'd also think a lot of people fly Icelandair because of the novelty, but maybe not)

[Didier]

Thinking more about this, I realize Delta is much more efficient for non-local travelers.

[HiawathaGuy]

Sun Country plans daily non-stop Minneapolis-Denver flights
http://www.bizjournals.com/twincities/n ... nstop.html

Keep adding more flights SY!

[MNdible]

I have to assume that Sun Country adding service to Denver has more to do with appeasing their core customer base (which anecdotally is pretty loyal) than it is about making money. That route is brutally competitive -- with Sun Country, you'll have five carriers flying nonstop.

[HiawathaGuy]

I have to assume that Sun Country adding service to Denver has more to do with appeasing their core customer base (which anecdotally is pretty loyal) than it is about making money. That route is brutally competitive -- with Sun Country, you'll have five carriers flying nonstop.

Agreed. But I did like this tidbit: "The airline is also offering connecting flights to Denver International Airport from Boston; New York City; and Washington, D.C., through Minneapolis-St. Paul International Airport."


Something that Southwest can't do very well.

[MSPtoMKE]

I have to assume that Sun Country adding service to Denver has more to do with appeasing their core customer base (which anecdotally is pretty loyal) than it is about making money. That route is brutally competitive -- with Sun Country, you'll have five carriers flying nonstop.

Actually, there will be 6 carriers, more than any other market out of MSP. Delta, Frontier, Spirit (seasonal), Southwest, Sun Country, and United. Chicago used to have 6 carriers between ORD and MDW, until Sun Country pulled out earlier this year, I think it was. I wonder if Denver will fare better for them. MSP-DEN is the second biggest city pair from here, after MSP-ORD.

[Ottergoose]

Delta will be flying what could be the last round of scheduled flights on a 747 out of MSP this weekend. There are six arrivals or departures to see through Monday morning between MSP and Atlanta - should be a good show from the new aircraft viewing area.