Delta, Midwest expand marketing alliance

(AP) - Delta Air Lines Inc. is expanding a marketing alliance with Midwest Airlines, once an acquisition target of Delta rival AirTran Airways.

Atlanta-based Delta and Milwaukee-based Midwest said Monday they have agreed to a multifaceted alliance that will include reciprocity between the two airlines' frequent flyer programs, new joint marketing efforts and expanded access to airport lounges throughout North America.

The agreement extends Midwest's long-standing marketing agreement with Northwest Airlines to Delta, which acquired Northwest on Oct. 29.

Under the new agreement, Midwest and Delta frequent flyers will be able to earn or redeem frequent flyer miles on either airline's network through the Delta SkyMiles, Northwest WorldPerks and Midwest Miles programs.

The new codeshare arrangement will go into effect in June, while the frequent flyer portion of the agreement will begin later this year, the airlines said in a joint statement.

Both airlines will conduct expanded marketing and advertising campaigns to promote the new alliance. They also will expand the existing Midwest-Northwest airport club membership agreement to include Delta Sky Clubs.

Midwest's existing codeshare agreement with Northwest will be phased out and replaced with the new Delta agreement. Both Delta and Northwest will be using the Midwest code on flights they operate on mutually agreed flights and city pairs.

The Delta and Northwest codes will not be available for use by Midwest on the flights it operates.

AirTran, a unit of Orlando, Fla.-based AirTran Holdings Inc., made a hostile takeover bid of $78 million for Midwest in June 2005. AirTran raised its offer several times, topping out with an offer worth an estimated $445 million when it was made in August 2007. Each time, its offer was rejected.

Midwest ultimately agreed to be sold to private equity firm TPG Capital for about $450 million.

AirTran executives said recently that they will add service to Milwaukee to continue to try to gain market share from Midwest.

During an investor conference Monday, AirTran Chief Executive Robert Fornaro didn't address the Delta-Midwest alliance specifically during his prepared remarks, but he did say that AirTran believes it can grow in Midwest's home base without Midwest under its wing. He also cited the weak economy and how it has affected Midwest.

"We're very glad we were unsuccessful with that purchase," Fornaro said. He added, "The opportunity to expand in Milwaukee will be a very good one for us. We didn't have to buy that company. The opportunity is out there because of the poor economy."

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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