The newly emerging regional airline model is gaining more complexity as holding companies that try to build brands divisions start to compete with their regional capacity purchase partners.
That is what is being played out, with as yet unknown consequences, between Delta and Republic, which has 40 aircraft in the Delta Connection network. Meanwhile, its Frontier/Midwest branded operations go head-to-head with Delta. The major carrier is now further pulling out of its former ownership role with Midwest, according to Travel Blogger Brett Snyder who noticed the frequent flyer partnership between Delta and Midwest is ending on 07-Jun-2010.
Meanwhile, Republic continues to wrestle with its choices for a booking platform, as well as frequent flyer partner, meaning it may be down to the Frontier programs.
Delta’s three-year Midwest Airlines partnership began with Northwest, which, while trying to discourage AirTran from gaining a Midwest foothold and growing to become a larger competitor, blocked the low cost carrier's move to acquire Midwest in 2007. In order to do so, it worked with TPG to acquire Midwest Airlines, ultimately evolving the relationship with codesharing and frequent flyer programs. Republic ultimately acquired the Milwaukee-based airline, as part of a financing deal it did to bolster one of its capacity purchase clients.
Snyder spotted the end of the Delta frequent flyer program in a note on the Delta website, but could find no similar note on either the Midwest or Republic sites. “That tells me it’s Delta that said this wasn’t a good idea,” he told readers. “They were effectively supporting a competitor that’s also a supplier. As Republic continues to try to build a single brand as a more fierce competitor, we can probably expect to see more airlines re-evaluate their relationships.”
And, that is something to watch in the next iteration of the US regional airline industry.