So you're a large consumer company with a virtual lock-in in your home town. You have other large competitors at a national level, but long-time market presence coupled with some local governmental help maintain your position. So what do you do?
Well, if you're Northwest Airlines, the answer is clear – gouge your home town as much as possible!
I'm sitting here in the Minneapolis/St. Paul International Airport (MSP, for those who remember these things) looking at gate after gate, plane after plane, and check-in counter after check-in counter of Northwest Airlines facilities. Did I fly Northwest? No way. A ticket on Northwest into here was $1200 non-stop, $1100 with a stop in Detroit (Northwest's 2nd home here in the US). United, Continental and Delta were enjoying the ceiling set by NW and were in the $800-$900 range, while AA had broken ranks with their fellow oligopolists and was in the $500 range, with ATA down at $350.
People I talk to who live here say its like that all of the time. Basically their reward for being home to the corporate HQ and letting the airline lock-up over half of their gates is to pay perpetually higher airfares. A drain on every MSP business that requires travel. A new kind of leisure tax for every Minnesotan looking to getaway. (The other guys do this as well, but I'd be interested if anyone can come up with a case worse than MSP right now).
Other than basic griping, I have two points: 1) if you live in MSP, you should be fighting back more. There's new, aggressive airlines out there – pry some gates from NW's hands and let JetBlue, Independence or the like get a start here. No one will lose from this except NW. 2) This is just another example of the poor citizenship of our older, large airlines. Keep these kind of things in mind next time you hear them asking for support for government handouts in order to support their broken business models.