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20-May-2011 4:24 PM

SkyWest loses on AirTran deal

Analysis

Having only just peeled back the first layer of the AirTran onion, Southwest CEO Gary Kelly reported at the company's annual shareholders meeting he is more excited than ever but, for SkyWest, the news is predictably bad. It is losing its six-city capacity purchase feed at Milwaukee.

SkyWest currently serves six routes, using four aircraft between Milwaukee, Des Moines, Omaha, St Louis, Indianapolis, Akron and Pittsburgh. The five-year agreement began in 2009 with a 120-day cancellation notice clause.

The move was prompted by Southwest's pilot contract which does not allow codesharing in the US, according to the Dallas Morning News, which attended the meeting and the press scrum afterwards where Mr Kelly made his remarks.

Southwest is the smallest of the three low-cost carriers in the Milwaukee market and its acquisition of AirTran now pits Frontier against the behemoth airline. Southwest is considering how it can keep those cities in the Milwaukee sphere. Saying Milwaukee remains a good opportunity, despite Southwest's Midway hub under 100 miles from MKE, he said any service to those points would be with larger aircraft.

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