US Airways swallows Midway!

Read the forum code of contact

Member for

24 years 2 months

Posts: 7,536

US Airways, Midway Airlines announce affiliation:

MORRISVILLE, N.C. - Midway Airlines Corp., which filed for bankruptcy last year after the Sept. 11 terrorist attacks, has signed a letter of intent to become a part of US Airways.

In a press release late Wednesday, Arlington, Va.-based US Airways said Midway will operate as part of its US Airways Express, flying a fleet of regional jets beginning in October.

The eight-year agreement is subject to several conditions including Midway's ability to secure an additional $5 million in capital, additional planes and reaching agreements with its various unions.

Midway said that it will eliminate the rest of its fleet of six Boeing 737 aircraft, and lay off 400 workers.

Robert Ferguson, Midway's chief executive and president, said US Air would pay Midway a fee to provide the service, but he declined to say how much the fee would be.

In a brief news conference just after midnight Thursday, Ferguson said he hoped to eventually hire back at least two-thirds of the Midway employees being laid off. Until then, unpaid wages to employees would be paid on the individual employee's next regularly scheduled pay date.

Midway had filed for Chapter 11 bankruptcy protection in August 2001 citing a drop in number of passengers. At the time, the Morrisville-based carrier listed assets of $318 million and debts of $232 million.

Midway continued flying on a reduced schedule but stopped operations altogether after Sept. 11. It resumed flying Dec. 19 after receiving a $12.5 million grant from the federal airline bailout program.

"Ultimately in business you have to make a buck, and we were unsuccessful in doing that," Ferguson said.

He estimated that his airline was losing $1 million to $1.5 million a month since resuming operations.

US Airways has said the addition of regional flights is part of its reorganization plan, which includes a $1 billion federally guaranteed loan and a nearly equal sum in wage and benefit concessions from pilots, flight attendants and other workers.

As part of the arrangement with Midway, US Airways will provide standby transportation to passengers currently holding Midway tickets during the suspension of Midway's operations and transition.

US Airways also will implement a program to allow Midway Airlines' frequent fliers to convert their credits to Dividend Miles for future use on US Airways and partner carriers upon completion of the agreement.

US Airways Express will have an initial operating a fleet of five 50-seat Bombardier CRJ regional jets, with that fleet growing to up to 18 CRJs by April 2003, according to the agreement.

Ferguson added that the arrangement between the two airlines is contingent upon approval by the bankruptcy court.
***********

US Air to use Midway Air as regional airline :

NEW YORK, July 18 (Reuters) - US Airways (U) said on Thursday it had entered into an agreement with Midway Airlines (MDWYQ), under which the North Carolina carrier, which closed down on Sept. 12, will operate as US Airways Express from October.

Under the eight-year service agreement, Midway will fly a fleet of five 50-seat Bombardier CRJ regional jets, with that fleet growing to up to 18 CRJs by April 2003.

The agreement is contingent on several factors, US Airways said in a statement, including Midway's successfully securing $5 million in additional capital, acquiring additional aircraft and reaching agreements with its units of the Air Line Pilots Association (ALPA) and the Association of Flight Attendants (AFA) for related labor concessions.

Midway Airlines had filed for bankruptcy before the Sept. 11 attacks on the World Trade Center and Pentagon, and shut down completely the day after.

It resumed flights to six East Coast cities in December after receiving cash grants from the federal government as part of a national $15 billion bailout packaged for the industry after the attacks.
******

Original post