Midway Airlines (1976–1991): Difference between revisions

The airline was notable for breathing new life into [[Midway International Airport]], then called Chicago Midway Airport, which hadwas lostalmost mostdeserted ofwhen its scheduled flights to [[O'HareMidway Internationalstarted Airport]]. The airline took its name from the airport, which in turn took its name from the [[World War II]] [[Pacific War|Pacific theater]] [[Battle of Midway]]operations. The carrier was also notable for pursuing at least three distinct business models during its life, starting as a discount carrier, moving to an all business-class airline before ending its life as a more conventional airlinehub carrier.

Midway was never highly or consistently profitable, but unlike many bigger and/or more prominent airlines (e.g. [[Braniff International Airways|Braniff]], [[People Express Airlines (1980s)|People Express]], [[Western Airlines]] and [[Piedmont Airlines (1948–1989)|Piedmont Airlines]]) towhich pickdisappeared justthrough abankruptcy few)or mergers, it survived the 1980s, an achievement. Unfortunately, managementthe threwcarrier itperished allsoon awayafter inattempting oneto disastrousgrow 1989 decision, thesubstantially purchaseby ofpurchasing the [[Philadelphia International Airport|Philadelphia]] hub of bankrupt [[Eastern Air Lines]]. This led directly to Midway’s March 1991 [[Chapter 11]] filing. A deal was struck to sell the company, still operating in bankruptcy, to [[Northwest Airlines]], which backed out at the last minute, leaving Midway dead in November 1991.

A group of investors, including Carlson, bought the airline's name (for $20,000) and started another [[Midway Airlines (1993–2003)|Midway Airlines]], which flew from 1993 to 2003.<ref>[https://www.chicagotribune.com/1993/08/11/founder-of-midway-air-recycling-name/ ''Founder of Midway Air Recycling Name'', Chicago Tribune, August 11, 1993]</ref><ref name="wp81501">{{cite news |title=Midway Airlines Files for Bankruptcy |newspaper=[[The Washington Post]] |archive-url=https://web.archive.org/web/20220807165727/https://www.washingtonpost.com/archive/business/2001/08/15/midway-airlines-files-for-bankruptcy/ef0d0e09-01d3-47c7-bac5-e65b8719957e/ |archive-date=2022-08-07 |url-status=live |url=https://www.washingtonpost.com/archive/business/2001/08/15/midway-airlines-files-for-bankruptcy/ef0d0e09-01d3-47c7-bac5-e65b8719957e/}}</ref>

In June 1976, [[Lamar Muse]], founding president of [[Southwest Airlines]], testified to Congress. Representative [[John G. Fary]], in whose district wascontained Midway Airport, asked if Muse had any ideas how to revive the airport, then “virtually a ghost town”. Muse said, in part, “…you could do exactly the same thing at Midway that Southwest has done at Love Field in Dallas…”<ref>{{cite report|title=Civil Aeronautics Board Reports|volume=78|year=1978|page=514|url=https://hdl.handle.net/2027/ien.35559002074619}}</ref> Muse said he incautiously aireddiscussed this idea in the offices of airline consultants Simat, Helliesen & Eichner (SH&E), where partner John Eichner was a friend and frequent business partner of Muse. Two other SH&E consultants took the idea to former [[Hughes Airwest]] executive Irving Tague and incorporated Midway Airlines (October 13, 1976)<ref>[https://opencorporates.com/companies/us_de/829940 Opencorporates record of Midway Airlines incorporation]</ref> to be first in line with the CAB. Andwith this idea. founderFounder Kenneth Carlson was in fact an SH&E vice president immediately prior to starting Midway Airlines.<ref name="Carlson">{{cite report|title=Economic Cases of the Civil Aeronautics Board |volume=87, part I|date=October 1980 – January 1981|page=682|url=https://hdl.handle.net/2027/osu.32437000534244}}</ref> In response, Muse created a subsidiary, Midway (Southwest) Airway Co., which also applied to the CAB. Muse’sMuse idea waswanted to connect Midway Airport to 15 cities about 200-500200–500 miles from Chicago, whereaswhile Midway Airlines took a smaller list of six cities to the CAB.<ref>{{cite book |last=Muse |first=Lamar |author-link=Lamar Muse |date=2002 |title=Southwest Passage |publisher=Eakin Press |pages=166-193166–193|isbn=1571687394}}</ref>

Midway Airport was a flashpoint for critics of airline regulation because the slowCAB-regulated and bureaucratic CABindustry failed to resuscitate the airport, a priority for the City of Chicago and the Illinois [[Parliamentary delegation#In the United States|congressional delegation]]. Muse said in July 1977 Congressional airline deregulation hearings (when total airline service at Midway was two [[Delta Air Lines|Delta]] flights/day) that, based on its experience in Texas, Southwest would, within a year, pumpcarry 5five million passengers per year through Midway with 92 737 departures/weekday (79 per day on weekends).<ref>{{cite report|title=Aviation Regulatory Reform: Hearings before the Subcommittee on Aviation of the Committee on Public Works and Transportation, House of Representatives, Ninety-Fifth Congress, First Session, on H.R. 8813 (introduced August 13, 1977)|publisher=U.S. Government Printing Office|location=Washington, DC|pages=493-496493–496|year=1977|url=https://hdl.handle.net/2027/umn.31951002834663r}}</ref>

But Southwest’s board of directors was not supportive and theMidway plan wasbecame a bonefocus of contention in Muse’sMuse's feud with Southwest founder [[Rollin King]], which ultimately led to Muse's resignation from Southwest in March 1978.{{sfn|Muse|2002|p=193}} This helped clear the way for Midway Airlines. HistoryMuse lateraccurately vindicatedpredicted MuseMidway's viewfuture ofimportance Midway airport as ato Southwest: opportunity (as of March 5, 2024, Southwest scheduled up to 249 departures per day at Midway).<ref name="WNMDW">[https://swamedia.com/media_storage/city_fact_sheets/MDW.pdf Southwest Airlines City Facts for Chicago (Midway), accessed April 2, 2024]</ref> Midway Airport didreached notMuse's reachpredicted the 5five million annual passengers/year level untilin 1987.<ref>{{cite report|title=FAA Statistical Handbook of Aviation|year=1987|publisher=Federal Aviation Administration|page=84|url=https://hdl.handle.net/2027/mdp.39015018250038}}</ref>

===1976 - November, 1979: extended gestation - everyone wants Midway Airport, even Federal Express===

Midway Airlines,' progress from concept to reality, reflected the progress of US airline deregulation, for which the inflection point was the high-profile 1975 [[United States Senate|Senate]] hearings on the CAB by Senator [[Ted Kennedy]]. Ex-antePrior to these, newcertification scheduledof carriersignificant certificationnew airline was unthinkable, it hadn’t happened in decades. Ex-postAfter the hearings, there was a sense of possibility, which is why, in 1976, the idea of Midway Airlines was plausible.<ref>{{cite report|last1=Bailey|first1=Elizabeth E.|last3=Kaplan|first3=Daniel P.|last2=Graham|first2=David R.|title=Deregulating the Airlines: An Economic Analysis|publisher=Civil Aeronautics Board |date=May 1983 |pages=26-2926–29|url=https://hdl.handle.net/2027/ien.35556021337282|ref={{sfnref|BG&K|1983}}}}</ref> But CAB bureaucracy still moved slowly. However, inIn 1977, President [[Jimmy Carter]] appointed deregulatoreconomist [[Alfred E. Kahn|Alfred Kahn]] to run the CAB, handingwith controla tomandate for reformersreform, thereby completely changing the nature and tempo of itsCAB decisions.{{sfn|BG&K|1983|p=29-34}}<ref>{{cite book|last=McCraw|first=Thomas K.|title=Prophets of Regulation|isbn=0674716078|publisher=Belknap Press|location=Cambridge, Massachusetts|year=1984|chapter=Chapter Seven: Kahn and the Economist's Hour|url=https://archive.org/details/prophetsofregula00thom}}
</ref> The Carter administration (and Congress) waswere in favor of opening up Midway Airport to low-cost air travel.<ref>{{cite journal|journal=Economic Cases of the Civil Aeronautics Board|volume=78|title=Chicago-Midway Low-Fare Route Proceeding|date=August-SeptemberAugust–September 1978|publisher=Civil Aeronautics Board|page=485|url=https://hdl.handle.net/2027/osu.32437011657497|ref={{sfnref|Proceeding|1978}}}}</ref><ref>[https://www.newspapers.com/image/386495676 ''Cut-rate Midway flights OKd by U.S.'' Chicago Tribune, December 3, 1977]</ref> The CAB announced in August 1977 that it would decide the Midway airport proceeding by August 1978, incredibly fast forby theprior CAB standards.{{sfn|Proceeding|1978|p=481}}

The August 1978 CAB ruling (against a backdrop of the [[Airline Deregulation Act]] going through Congress) was good news/bad news for Midway. Good news:Airlines; it got the routeswhat it wanted. Bad news:but so did everyone else. Midway believedargued to the CAB that it deserved (as the self-proclaimed innovator) all six Midway routesAirport to itself, at least for a time, to become established. But the CAB noted that Southwest might be the innovator (see prior section) and projections showed itSouthwest to be the mostlow-cost efficientapplicant. applicantNonetheless, but the CAB wouldn't play favorites. Midway, Southwest and [[Regional airline#Early growth|local service airline]] [[North Central Airlines|North Central]] each got all six routes and Northwest and Delta got the select Midway routes they asked for. In addition, Midway and the Southwest Midway subsidiary were both given economic certification as well. TheFurther, the CAB was on a roll: it had already opened an even broader Midway airportanother proceeding for another 24 Midway Airport routes.{{sfn|Proceeding|1978|p=454-592}} ThereGiven waswhat substantiallooked doubtlike Midwaysubstantial Airlinesfuture wouldservice getat fundingMidway givenAirport, whatthere lookedwere likeserious andoubt avalancheMidway ofAirlines futurewould serviceattract at thesufficient airportinvestment.<ref>[https://www.newspapers.com/image/386662496 ''Midway Airlines can’t get backing'', Chicago Tribune, December 17, 1978]</ref>

ButHowever, notwithstandingonly earlyMidway interest, few airlinesAirlines made any subsequent moves toward Midway Airport, because deregulationas putof allJanuary networks1979, deregulation opened up forthe grabs;entire thereUnited wereStates moreto pressingairline concernscompetition.<ref>[https://www.newspapers.com/image/385469790 ''Midway budget flights in spring'', Chicago Tribune, November 13, 1978]</ref> While Southwest continued to participate in Midway CAB cases, it took no practical steps towards service. Lamar Muse was long-gone, and: Southwest would not enter Midway until 1985.<ref name="WNMDW"/> Even with the way relatively clear, Midway Airlines found it hard to raise money, Chicago investors were generally uninterested.<ref>[https://www.newspapers.com/image/386818628/ ''Lot of groundwork preceded first flight of new airline'', Chicago Tribune, October 31, 1979]</ref> On August 2, 1979, itMidway announced it had raised $5.7mm from 16 private investors, only one of which was Chicago-based, allowing the airline to head towards a November 1, 1979 launch.<ref>[https://www.newspapers.com/image/386926625/ ''New airline to offer low-cost rates from Midway to 3 cities'', Chicago Tribune, August 3, 1979]</ref> In September 1979, the CAB gave 15 airlines (including, of all airlines, [[Wien Air Alaska]]) the right to fly those other 24 routes from Midway. One was [[FedEx Express|Federal Express]], having obtained [[Boeing 737#737-200|Boeing 737-200QC]] aircraft with which it wanted to fly packages at night and passengers during the day.<ref>{{cite journal|journal=Economic Cases of the Civil Aeronautics Board|volume=83, Part 1|title=Chicago-Midway Expanded Service|date=September-OctoberSeptember–October 1979|publisher=Civil Aeronautics Board|pages=272-412272–412 |url=https://hdl.handle.net/2027/ien.35559002074676}}</ref> This was Fedex’s “Project Torso”, whereinin which Fedex founder [[Frederick W. Smith|Fred Smith]] briefly toyed withconsidered the idea of passenger service.<ref>{{cite book|first=Roger J.|last=Frock|title=Changing How the World Does Business|date=2006|location=San Francisco|publisher=Berrett-Koehler |pages=181-182181–182|isbn=1576754138|url= https://www.bkconnection.com/books/title/changing-how-the-world-does-business}}</ref> At the time, Fedex had a highly profitable monopoly on overnight delivery growing at 40% per year.<ref>[https://www.newspapers.com/image/772214000 ''Federal Express Seeking Expansion Area'' Memphis Commercial Appeal, September 10, 1978]</ref> Passenger service was a distraction. But ultimatelyUltimately, none of the 15, other than Midway, did anything withused this broad new authority.

Midway duly started on November 1, 1979 on three routes: Detroit, Cleveland and Kansas City. Midway’s original business model wasremained inspired by Southwest, but instead of Southwest’s 118-seat 737s, Midway started with three 83-seat DC-9-10s.<ref>[https://www.newspapers.com/image/386818674 ''Midway will run with 3 leased DC-9s'', Chicago Tribune, October 31, 1979]</ref> Midway’s fares were below those of conventional competitors at [[O’Hare International Airport|O’Hare]] and there was no food on board. In 1980, it expanded to 5 DC-9-10s.<ref>[https://www.newspapers.com/image/386889640/ ''Midway flaps wings harder'', Chicago Tribune, June 1, 1980]</ref> The airline ran unconventional offers like penny sales, offering the return trip at a penny with the outbound at the usual fare to fill up off-peak days.<ref>[https://www.newspapers.com/image/386776207 ''Midweek penny sale'', Chicago Tribune, August 3, 1980]</ref> At times this caused chaos as customers rushed to the airport to takebuy advantagesuch of themtickets.<ref>[https://www.newspapers.com/image/386951534 ''‘Penny’ fares bring stampede'', Chicago Tribune, January 29, 1980]</ref> ItBut the strategy worked. Midway was solidly profitable in 1981 (see nearby table), a genuine achievement forin only theits second full year of operation. In fact, theThe 1981 operating margin was the highest full-year operating margin Midway would ever attain. In 1982, the board fired the person responsible for this achievement.

Early Midway was marked by significant management turnover. Some founders (like Carlson)<ref name="Carlson"/> were gone by 1980 and in early 1982, Irving Tague took a leave of absence for “personal reasons,” with David Hinson becoming acting chair.<ref>[https://www.newspapers.com/image/387735764/ ''Midway Air chief takes leave'', Chicago Tribune, March 9, 1982]</ref> Gordon Linkon, ex-[[Frontier Airlines (1950-1986)|Frontier]], was made President in 1980,<ref>[https://www.newspapers.com/image/386836164 ''He takes a gamble on Midway'', Chicago Tribune, August 20, 1982]</ref> embracing the low-cost ethic. Midway went public in December 1980, 850,000 shares at $13.50.<ref>[https://www.newspapers.com/image/386826995 ''Midway offer sold out'', Chicago Tribune, December 5, 1980]</ref> But the board was dissatisfied by the airline’s discount image and some of those promotions. Chicago was particularly badly affected by the extended disruption caused by the August 1981 [[Professional Air Traffic Controllers Organization (1968)|air traffic controllers strike]]. [[United Airlines]] grounded 50 aircraft, and Midway found itself unable to fully employ eight [[Douglas DC-9|DC-9-30]]s it had acquired from [[Ansett Australia]].<ref>[https://www.newspapers.com/image/387799558 ''O’Hare could lose ‘busiest’ status'', Chicago Tribune, March 18, 1982]</ref> A new Boston route failed in the face of severe competition.<ref>[https://www.newspapers.com/image/387789874/ ''Midway feeling growing pains'', Chicago Tribune, March 17, 1982]</ref> Consequently, results for the first quarter of 1982 were poor, as with the rest of the industry. In what was apparently a long-planned move, the directors fired Linkon in July 1982,<ref name="bass1">[https://www.newspapers.com/image/387970958/ ''Ex-Federal Express Boss to join Midway'', Chicago Tribune, July 30, 1982]</ref> shortly after heMidway turned inachieved a profitable second quarter, one in which most of the industry made a loss.<ref name="bass2">[https://www.newspapers.com/image/888867188 ''Midway Chairman Appointed After a Search of Three Months'', Omaha World-Herald, August 5, 1982]</ref>

New Midway Chair/CEO Arthur Bass was part of the founding management, and a former president, of Federal Express.<ref name="bass1"/><ref name="bass2"/> Bass hired Neal Meehan, founding CEO of [[New York Air]], as president.<ref>[https://www.newspapers.com/image/388079855 ''Midway Airlines names president'', Chicago Tribune, October 11, 1982]</ref> They took Midway upmarket, aimingaimed to make Midway Airport the favored airport of the Chicago business traveler, similar to [[LaGuardia Airport|New York LaGuardia]] or [[Dallas Love Field]].<ref>[https://www.newspapers.com/image/387841686/ ''Midway Airlines out to polish its image, fly full-fare skies'', Chicago Tribune, January 5, 1983]</ref> GivenMidway Midway’s convenience this seemed reasonable, and there was surely room for improvement. The airportAirport, at the time, had no jetways, and suffered from a lack of maintenance on the part of the city.<ref>[https://www.newspapers.com/image/388700010 ''Midway to post first profit since 1982'', Chicago Tribune, June 21, 1984]</ref><ref>[https://www.newspapers.com/image/387921257 ''The puddleport…'', Chicago Tribune, April 26, 1982]</ref> But Bass and Meehan overcorrected, moving the airline toinstituted “Metrolink” branded all-business class service, with four-abreast seating, a “business center” at Midway airport, etcjetways and other amenities.<ref>[https://www.newspapers.com/image/388021110 ''Midway Airlines zeroes in on business traveler'', Chicago Tribune, May 20, 1983]</ref> Florida service, which Linkon started, was dropped. No one seemed to notice that Southwest’s frequent, reliable service garnered substantial business clientele despite no amenities. There was no answer as to what to do with low-density aircraft during off-peak periods. Ironically, [[Michael E. Levine]], Meehan’s successor at New York Air (also a DC-9 operator), turned that airline around in part by taking it modestly up-market with a few judicious perks, (like sandwich bags) without resorting to four-abreast seating.<ref>[https://www.nytimes.com/1983/12/25/business/piloting-new-york-air-out-of-the-red.html ''Piloting New York Air Out of the Red'', New York Times, December 25, 1983]</ref>

Metrolink failed. 1983 and 1984 financial results were poor, with losses greatly exceeding the cumulative profits of 1981 and 1982. Meanwhile, in 1984, reacting to a proposal from [[Air Florida]] executives, Midway acquired, in stages, the remains of that bankrupt and grounded carrier. There were two attractions (1) winter demand to offset the seasonality of the Metrolink system and (2) Air Florida’s slots at airports like LaGuardia and [[Ronald Reagan Washington National Airport|Washington National]].<ref>[https://www.newspapers.com/image/302267552 ''Air Florida, pilots ordered back to the negotiating table'', February 6, 1985]</ref> The deal nominally cost Midway $53mm, most of that ($35mm) for three Air Florida 737-200 aircraft.<ref>[https://www.newspapers.com/image/631427552 ''Objections Flood Air Florida-Midway deal'', Miami Herald, September 26, 1986]</ref><ref>[https://www.newspapers.com/image/631426686 ''Air Fla.-Midway Pact OK'd'', Miami Herald, September 26, 1986]</ref> In fact, Midway never paid for the airplanes, passing them along to a lessor to purchase and leasing them back.<ref name="SLB">[https://www.newspapers.com/image/302203980 ''Air Florida name and logo now just a thing of the past'', Miami News, August 15, 1985]</ref> Midway provided working capital to get the remains of Air Florida back in the air in October 1984, flyingwhich flew under contract to Midway (with Midway marketing and selling tickets) as “Midway Express” until August 1985, when the purchaseAir wentFlorida thru. “Operated by Air Florida”purchase disappearedclosed and Midway Express shifted to full Midway Airlines branding.<ref name="SLB"/>

Florida service worked. inIn Midway’s 1985 annual report, the airline said Midway Express made a profit of $1.4mm for Midway pre-merger.<ref>[https://www.departedflights.com/ML85reportP1.html Midway Airlines 1985 Annual Report, pg. 2]</ref> ButMoney-losing Metrolink service made even less sense with Midwayalongside runningprofitable all-economy class 737s to Florida and all-business class DC-9s elsewhereservice. And 1984 results also included a $1.5mm writeoff for an expensive abortive attempt to establish a helicopter service between Midway, O’Hare and [[Meigs Field]], to be called '''Chicago Airlink'''.<ref>[https://www.newspapers.com/image/388519557 ''Midway to write off Airlink try'', Chicago Tribune, December 29, 1984]</ref> In January 1985, Bass resigned, followed by Meehan in February, with David Hinson, a Midway founder and founding board member, taking over.<ref>[https://www.newspapers.com/image/388421477 ''Midway’s Bass resigns; Hinson to take reins'', Chicago Tribune, January 19, 1985]</ref><ref>[https://www.newspapers.com/image/388544762/ ''2d top Midway executive resigns'', Chicago Tribune, February 12, 1985]</ref> The airline announced cutbacks and layoffs (Midway Express was unaffected)<ref>[https://www.newspapers.com/image/388557309 ‘’Midway Airlines to slash flights, lay off employees’’, Chicago Tribune, February 13, 1985]</ref> and dumpedended Metrolink.<ref>[https://www.newspapers.com/image/388440362 ''Midway out to shed strictly-business image'', Chicago Tribune, February 20, 1985]</ref> In May, Hinson warded off an attempted [[proxy fight]] by other (departed) founders, including Carlson, wanting to return itthe airline to its original low-fare, no-frillsbusiness orientationmodel.<ref name="morelike">[https://www.newspapers.com/image/388608885 ''Shareholders launch Midway fight'', Chicago Tribune, May 22, 1985]</ref> At the time of Bass’s departure, Hinson gamely defended Metrolink, but one of Midway’s responses against dissident shareholders was to note that managementthe Bass team was gone.<ref>[https://www.newspapers.com/image/388580646/ ''Midway lawsuit strafes dissident stockholders'', Chicago Tribune, May 29, 1985]</ref> Metrolink was an expensive misadventure, but the airport now had jetways and Midway at last understood that Chicagoans really like Florida in the winter.

===Mid-1985 – June 1989: peakprofitability Midwayas a conventional airline===

Hinson wanted Midway to be “more like other airlines,”<ref name="morelike"/> and indeedMidway he builtbecame a relentlessly conventional hub airline, essentially the only differentiator being Midway Airport. The DC-9s were converted to two-class seating<ref>[https://www.newspapers.com/image/388949289 ''Management brightens Midway horizon'', Chicago Tribune, April 28, 1986]</ref> and Midway built out its network to both business and leisure destinations (cities like Las Vegas<ref>[https://www.newspapers.com/image/388840302 ''Midway Air to add jets'', Chicago Tribune, May 16, 1986]</ref> and Phoenix<ref>[https://www.newspapers.com/image/388950979 Midway advertisement for new Phoenix service, Chicago Tribune, May 14, 1987]</ref>) from coast to coast, acquiring [[McDonnell Douglas MD-87]]s, the short, high-performance version of the [[McDonnell Douglas MD-80|MD-80]], to allow the airline to reach to the west coast, at the time a non-trivial feat from Midway Airport’s short runways. Midway acquired its own regional airline subsidiary, Midway Commuter, to fly from Midway to smaller cities around Chicago. 75% of Midway Commuter passengers connected to mainline flights at Midway airport.<ref>[https://www.departedflights.com/ML88reportcover.html Midway Airlines 1988 Annual Report, pg. 13, accessed April 16, 2024]</ref> Midway had its own maintenance facility in Miami (an Air Florida legacy) <ref>[https://www.newspapers.com/image/388814322/ ''Things are looking up for buoyant Midway'', Chicago Tribune, December 29, 1986]</ref> and built a simulator facility.<ref>[https://www.departedflights.com/ML88reportcover.html Midway Airlines 1988 Annual Report, pg. 17, accessed April 16, 2024]</ref> It was just like a big airline, only smaller. The strategy produced profits, but with modest margins that never challenged that achieved in 1981 with the discount model. However, during this period much larger airlines like [[Eastern Air Lines|Eastern]], [[Pan Am]], [[America West Airlines]], [[Continental Airlines|Continental]], [[People Express]], etc, all made (at least at times) heavy losses, and other high profile names like [[Pacific Southwest Airlines]] and [[Western Airlines]] merged out of existence. Modestly profitable it might be, but Midway stood out just by surviving.<ref name="prospers">[https://www.newspapers.com/image/388896550/ ''Midway prospers by remaining small'', Chicago Tribune, November 27, 1987]</ref>

On a June 1988 weekday, Midway scheduled 116 nonstop flights into Midway Airport from 25 airports, along with 75 Midway Connection nonstops from 17 other airports. They flew Chicago Midway (MDW) - Miami (MIA) - Saint Croix (STX) - St. Thomas (STT) round trip as well as Chicago Midway (MDW) - Fort Lauderdale (FLL) - Nassau (NAS) round trip ; aside from those, all Chicago flights were nonstop to and from Midway Airport. Midway Airlines′ peak year was 1989, when it flew 10.1&nbsp;billion revenue passenger-kilometers, compared to 0.6&nbsp;billion in 1981.<ref>''Air Transport World''</ref>

===June 1989 - November 1991: throwinguntimely itoverextension allleads awayto demise===

TheIn longMarch slow decline of1989 [[Eastern Air Lines]] ended in March 1989 withfaced a debilitating strike, tipping it into Chapter 11.<ref>[https://www.nytimes.com/1989/03/10/us/eastern-requests-bankrupt-status-to-cut-strike-loss.html ''Eastern Requests Bankrupt Status To Cut Strike Loss'', New York Times, March 10, 1989]</ref> InAs part of Eastern's attempts to raise cash, in June, Midway bought Eastern’sthe Philadelphia gates (and certain other assets, such as routes to Toronto and Montreal from Philly) as well as 16 DC-9 aircraft for $210mm from the bankrupt carrier.<ref>[https://www.newspapers.com/image/389233701 ''$200 million Midway offer on Eastern'', Chicago Tribune, June 1, 1989]</ref><ref>{{cite news|last=Salpukas|first=Agis|title=Eastern to Sell Operations in Philadelphia to Midway|url=https://www.nytimes.com/1989/06/17/business/eastern-to-sell-operations-in-philadelphia-to-midway.html|access-date=April 10, 2014|newspaper=New York Times|date=June 17, 1989}}</ref><ref name="BUY">[https://www.newspapers.com/image/389246474 ''Midway to buy Eastern property in Philadelphia'', Chicago Tribune, June 17, 1989]</ref> Further investment included hiring, refurbishing the aircraft and the former Eastern space in Philly, and heavy marketing to introduce east coast residents to Midway. Hinson’s rationale was that Midway was reaching the limits of growth in Chicago, it needed a second hub and this was its best opportunity.<ref>[https://www.newspapers.com/image/389289734 ''Midway sees return to profitability in second half of ‘90'', Chicago Tribune, May 11, 1990]</ref> The Philly hub was supposed to help drive Midway annual revenue to $2bn within two years.<ref>[https://www.newspapers.com/image/389250334 ''10 years later, Midway flying high'', Chicago Tribune, November 2, 1989]</ref> Philly was one of several major commitments in 1989. Midway ordered 29 [[McDonnell Douglas MD-82]]s for a nominal $900mm<ref>[https://www.newspapers.com/image/390245532 ''Midway places major jet order'', Chicago Tribune, March 31, 1989]</ref> as well as a nominal $244mm for 33 [[Dornier 328]] turboprops for Midway Connection.<ref>[https://www.newspapers.com/image/389242340 ''Midway to buy 33 airplanes'', Chicago Tribune, October 7, 1989]</ref> It also reintroduced first class on all routes.<ref>[https://www.newspapers.com/image/389460016 ''Classy Press Conference'', Chicago Tribune, May 19, 1989]</ref> Midway was living large.

[[USPhiladelphia Airways|USAir]] was thehad dominant Philly incumbent andhub hadoperator, littlethe desiremuch tolarger accommodate[[US MidwayAirways|USAir]].<ref name="BUY"/> At the end of 1989, Midway had 61 jets vs 441 for USAir.<ref name="ATA90"/> It wasnMidway't a fair fight but Midway picked it. Thes Philly hub launched November 15, 1989.<ref>[https://www.newspapers.com/image/389224986/ ''Midway spreads its wings to Philly'', Chicago Tribune, November 16, 1989]</ref> Fuel prices were up significantly in early 1990 over 1989, while Florida fares dropped $30significantly.<ref name="rather">[https://www.newspapers.com/image/389287608/ ''Losses and all, Midway would still rather be in Philadelphia'', Chicago Tribune, May 18, 1990]</ref> Then theThe US entered a [[Early 1990s recession in the United States|recession in July 1990]]. [[Iraq]] invaded [[Kuwait]] on August 2, pitching the US into the [[Gulf War]], inducing an [[1990 oil price shock|oil price shock]] and an immediate decline in internationalair travel, which only accelerated once fighting broke out.<ref>[https://www.nytimes.com/1991/01/27/travel/travel-advisory-gulf-war-leads-to-a-30-drop-in-world-travel.html ''Travel advisory; Gulf War Leads To a 30% Drop In World Travel'', New York Times, January 27, 1991]</ref> On October 19, 1990 less than a year after starting the hub, Midway announced it was leaving Philadelphia. Oddly,A silver lining was that USAir paid Midway $68mm for the former Eastern Philly gates (and Canadian routes).<ref name="casualty">[https://www.newspapers.com/image/389496791 ''Midway Air’s 2nd hub casualty of fuel costs'', Chicago Tribune, October 20, 1990]</ref><ref name=NYTquitPHLin1990>{{cite news|last=Berg|first=Eric N.|title=Midway Air Leaving Philadelphia|url=https://www.nytimes.com/1990/10/20/business/midway-air-leaving-philadelphia.html|access-date=April 10, 2014|newspaper=New York Times|date=October 20, 1990}}</ref> Had USAir not paid for them, Midway would have collapsed even sooner and USAir would likely have obtained the Philly assets for nothing; it's not like there were other bidders. USAir's payment was small next to Midway’s total Philly [[stranded asset|stranded investment]] but it was something. Midway’s 1990 losses vastly exceeded the sum total of every profitable year Midway ever had, but in fact the previous record loss in 1989 was also due to Philly: Midway had made a small profit in the first three quarters of 1989 and the 1989 substantial fourth quarter loss was Philly-driven.<ref>{{cite journal|journal=Air Carrier Financial Statistics Quarterly|title=Fourth Quarter and Twelve Months Ended December 1990 and 1989|date=December 31, 1990|publisher=US Department of Transportation |page=46 |url=https://hdl.handle.net/2027/nyp.33433016789764}}</ref><ref>[https://www.newspapers.com/image/389402710 Midway Airlines item under ''Earnings'', Chicago Tribune, February 21, 1990]</ref>

By March 1991, Midway filed for Chapter 11 in March 1991, Hinson describing it as a “minor setback”. In October the bankruptcy court approved a $175mm Northwest takeover dealoffer by [[Northwest Airlines]], including assuming remaining aircraft and employees. The court rejected a smaller, $110mm bid by Southwest, which did not offer to take aircraft or employees. Midway had lost $36mm since filing Chapter 11, against projected income of $6.5mm, and was down to $4mm in cash.<ref>[https://www.newspapers.com/image/389386251/ ''Northwest lands Midway Air'', Chicago Tribune, October 9, 1991]</ref> Northwest ran newspaper ads saying customers could book Midway with confidence but a month after agreeing to the deal, it pulled out, accusing Midway of showing inaccurate revenue figures for 1990 and ostensibly worried about environmental liability at Midway Airport. Why Northwest pulled out is unclear. It had huge debts of its own, having been taken private in ana untimely[[leveraged LBObuyout]] in 1989.<ref>[https://www.nytimes.com/1989/06/20/business/northwest-airlines-accepts-offer-of-3.6-billion-by-investor-group.html ''Northwest Airlines Accepts Offer Of $3.6 Billion by Investor Group'', New York Times, June 20, 1989]</ref> Some believed Northwest saw the Midway deal as risking a simultaneous deal to get funding from the state of Minnesota.<ref>[https://www.nytimes.com/1991/11/17/business/business-diary-november-10-15.html ''Business Diary November 10-15'', New York Times, November 17, 1991]</ref> Whatever the reason, Midway ceased flying November 13, 1991.<ref>[https://www.newspapers.com/image/389681010/ ''Midway Air halts operations'', Chicago Tribune, November 14, 1991]</ref>

DavidGordon HinsonLinkon, landedthe onpresident hiswho feet.achieved HeMidway's wenthighest onannual tooperating workmargin forin [[McDonnell1981, Douglas]]went andon servedto as the head of the [[Federal Aviation Administration]] under Presidentfound [[BillFlorida ClintonExpress]].<ref>[https://www.newspapers.com/image/418155363222132514 ''MidwayFlorida CEOExpress landsFrom FAAthe postGround Up'', MayOrlando Sentinel, July 149, 19931984]</ref>

* [[Orlando, Florida|Orlando]] ([[Orlando International Airport]])