Midwest Airlines has been silent for some time, but that doesn't mean that it's been having a good time. In fact, Midwest is on some folks' Titanic watch lists. We don't profess to know what's going to happen but we are pleased that the carrier is doing something about its situation rather than sitting and waiting for fuel to come down, the economy to come back, and things to get rosy again. Midwest, which went private late last year and is now partially owned by Northwest Airlines, has been hammered by fuel, just as everyone else has been, and new competition from AirTran in its home town of Milwaukee hasn't helped. Chief executive Tim Hoeksema (above) has taken a few steps such as moving to retire its fuel-guzzling MD80s, taking its wholly owned regional (Skyway) out of the flying business and now is taking the biggest step of all.
It's telling all employees that it wants pay cuts. Hoeksema says that Midwest's ALPA members earn 32% more at top of the scale than similarly situated pilots, while AFA member flight attendants earn 23% at top of the scale. Both work groups fear that this will gut their already concessionary contracts, and a look at the contract pay scales suggests that the $153 top of scale is similar to the AirTran hourly rates, but Tim says that the cost of pensions, health benies and other perks is 45% higher than elsewhere. Hoeksema is telling its non-unionised maintenance people and professional staff that the carrier will cut their pay by 5% to 10%, depending on skills, etc.
And Tim will take a 40% cut in total pay, estimated at $1.25 million for 2006,effective July 15. The other pay cuts don't become effective until ALPA and AFA ratify their pay cuts. As for work roster cuts, they're still working on that, according to a July 2 letter to all hands. Unfortunately, pay cuts and layoffs are fairly common these days, but we are pleased to see the leaders sharing in the pain.