REBECCA RAYKO / MIAMI
Midway Airlines has become the latest casualty in the financially-troubled US airline market, with the regional filing for Chapter 11 bankruptcy protection on 13 August.
The move has resulted in the North Carolina-based airline laying off half of its 1,400 workforce and grounding 17 of its 51 aircraft.
The airline blames a "calamitous drop" in business traffic for its escalating financial crisis, which has seen it report a loss in four of the last five quarters, culminating in a $15 million loss for the first six months of this year.
High fuel prices and increasingly fierce competition from major competitor Southwest Airlines, which entered Midway's Raleigh-Durham market two years ago, have taken a heavy toll.
Midway is highly reliant on business traffic out of its Raleigh-Durham hub, which is home to an equally cash-strapped high technology industry.
The downturn has seen one of its biggest corporate customers cutting its travel budget by 90% this year, says Robert Ferguson, Midway president and chief executive.
Ferguson adds that he will consider any options to keep the airline viable, including selling it.
The airline has grounded 13 Bombardier CRJ200s and four Fokker 100s, but will continue to operate 12 Boeing 737s and 11 additional CRJ200s. Midway has also cancelled the deliveries of eight 737-700s from a 15-aircraft order placed two years ago.
The airline plans to continue limited operations, flying 130 daily flights to 19 destinations out of Raleigh-Durham, but has cut service on nine of its least profitable routes.
The airline is negotiating a$10 million bank loan to keep it afloat for at least another two months.
Midway moved to Raleigh-Durham from Chicago in 1995 when American Airlines ceased operations there. Some analysts suggest that Midway's current financial troubles have not been helped by American, which ended its frequent-flyer partnership with the carrier on 30 April.
Since then, American has increased frequency to Raleigh-Durham with regional jet services in order to retain some of its frequent flyer customers.
Source: Flight International
