What Happened To Midway Airlines?

There were two carriers named Midway Airlines over the decades. The first was an airline flying out of Chicago between 1979 and 1991. Then, from 1993, another outfit going by the same moniker ran for a decade until 2003. Here is a look at what happened to these operations.

The original

The initial company that began at the end of the 1970s was named in relation to Chicago Midway Airport. The carrier was created with the intention to bring a breath of fresh air to the Illinois hub. Commencing operations on October 31st, 1979, it is widely seen as the first post-deregulation start-up.

The airline flew to many airports across all corners of the United States. Additionally, it reached international destinations in Canada and the Caribbean. The operator took on several DC-9 and MD-80 series aircraft along the way. Also, it held 14 Boeing 737 narrowbody jets.

However, the firm filed for Chapter bankruptcy 11 in March 1991. It attributed the rising cost of jet fuel amid the Gulf War and a drop in passenger demand due to a subsequent recession as contributing factors. Eventually, operations ceased on November 13th of that year, and the company was dissolved by 1992.

Same name, different carrier

According to The Washington Post, a group of investors soon bought the name of Midway Airlines to form a new carrier. This new venture was rooted in a previous operator called a Jet Express. This company previously performed code sharing feeder services for USAir and Trans World Airlines during the late 1980s and early 1990s. Now, it was looking to start fresh in Chicago.

According to Funding Universe, the newly-formed business was staffed by 150 workers, and most of them were former employees of the original Midway. Moreover, the new president, Kenneth T. Carlson, was one of the initial Midway’s founders back in the 1970s.

The new carrier began flying out of the same airport as the original Midway in November 1993. It flew to New York LaGuardia with two Fokker 100 planes. Over the next few years, operations expanded to Philadelphia, Boston, Allentown, Washington D.C., Orlando, Tampa, Dallas/Ft. Worth, and Denver.

A new home

1995 was an important year for Midway. Tight competition and limited gate space caused it to move to North Carolina. It had set up an office in Durham and formed a hub at Raleigh–Durham International Airport. The name of Midway was still fitting as it was now based in between the US’ North and South.

Following this switch, the carrier began ramping up its amenities in a bid to break out of the low cost-carrier mold. With this new approach, it placed an order for four new $45 million Airbus A320s. These narrowbodies helped the airline on expansions to the Caribbean.

During the first year at Raleigh, Midway served 1.2 million passengers, and its workforce amassed 1,100 staff members. However, there were troubles by the start of 1996, with several pilots being furloughed. Additionally, the Caribbean prospects did not work out, and the airline had to return three of its A320s.

There was positive activity on routes to Cancun and Las Vegas, while other quiet services were dropped. Midway also scaled up its customer service with promotions such as having at least one designated lavatory for females onboard its aircraft to appeal to businesswomen.

Nonetheless, despite its efforts, the carrier ended up losing $8 million for the year. However, the poor result didn’t deter executives from preparing for an initial public offering. There were high hopes as leadership hoped to triple the company’s size by the turn of the millennium.

Going public

The firm soon raised $20 million from two investors. These funds allowed it to purchase additional aircraft to take on new services to Atlanta. Then, in November 1997, it ordered 10 CRJs from Bombardier. These moves set Midway up well to go public on the NASDAQ stock exchange the following month.

There was a series of failed takeover attempts in the following years, and by 1999 the airline was once again facing tough competition. Southwest Airlines announced plans to serve Raleigh. Meanwhile, US Airways (previously USAir) provided low-cost alternatives via its MetroJet operations. Additionally, Midway’s flight attendants became unionized.

Regardless, Midway was still intent on growing and ordered 15 new 737 aircraft. It carried 2.1 million people by the end of 1999, and revenues were up three percent from 1998 to $218 million. However, profits were down to $9.4 million from $15 million the year before.

A twist of fate

In August 2001, Midway filed for Chapter 11 bankruptcy protection. The company blamed a significant drop in business travel, along with slowed air traffic growth and high fuel prices as the cause. It announced that it would lay off 700 employees immediately as a result of the move.

Deborah C. McElroy, president of the Regional Airline Association, emphasized that the carrier was facing the same issues as the rest of the airline industry. These problems were primarily poor sales to business passengers, along with rising fuel and labor costs.

“Business travelers make up more than 65 percent of regional airline traffic, so we have been affected in many markets by the economic slowdown,” McElroy said, as reported by The Washington Post.

“You’re experiencing the very significant increase in labor costs at the same time that your revenues are down. As a result, it makes it even more difficult to operate profitably. These issues have made it very difficult to operate profitably as an airline.”

Stuck in a rut

Midway was confident there it would return to profitability by reorganizing and reducing its route network to traditionally profitable routes. However, this wouldn’t be the case for the airline.

The carrier re-emerged two months after grounding following the September 11 attacks. It soon partnered with US Airways to operate regional jets as part of the US Airways Express service. However, on July 17th, 2002, Midway stopped flying once again, this time until February 2003.

The airline again worked on a limited-service with US Airways Express. However, it ceased operations on October 30th, 2003, amid Chapter 7 bankruptcy. Ultimately, the firm was unable to acquire enough capital to keep running despite multiple cash infusions. Existing troubles and the post 9/11 reality proved to be too much for the Midway.

What are your thoughts about the history of Midway Airlines? Did you fly with one of the two carriers? Let us know what you think of the companies in the comment section.