Midway Airlines (1976–1991): Difference between revisions

{{Short description|Chicago Midway Airport-based airline (1976–1991)}}

{{For|the North Carolina-based Midway Airlines|Midway Airlines (1993–2003)}}

{{Use mdy dates|date=April 2024}}

{{Infobox airline

[[US Airways|USAir]] was the dominant Philly incumbent and had little desire to accommodate Midway.<ref name="BUY"/> At the end of 1989, Midway had 61 jets vs 441 for USAir.<ref name="ATA90"/> It wasn't a fair fight but Midway picked it. The 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 $30.<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 the 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 international 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, less than a year after starting the hub, Midway announced it was leaving Philadelphia. Oddly, 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 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, Hinson describing it as a “minor setback”. In October the bankruptcy court approved a $175mm Northwest takeover deal, 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 an untimely LBO 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>

 

 

==Legacy==

As the Philly strategy turned increasingly sour and then imploded, David Hinson repeatedly defended Midway's overextension. It was simply the victim of circumstance.<ref name="casualty"/><ref name="rather"/><ref>[https://www.newspapers.com/image/389564895/ ''Midway’s hopes on hold'', October 25, 1990]</ref> As related above, Hinson wanted Midway to be like other airlines. Conventional wisdom was airlines have hubs, so Midway ran Midway airport as a hub. The airline would one day need to expand outside that airport. Therefore it needed a second hub. Of course, the fact was that Midway’s best margins dated to when it operated as a discount airline, not unlike Southwest’s unconventional model that was far more profitable still.

 

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In 1987 Midway Airlines purchased commuter air carrier '''Fischer Brothers Aviation''' based in Galion, Ohio, and moved the entire operation to Springfield, Illinois. Fischer Brothers Aviation had previously operated [[Allegheny Commuter]] service for [[Allegheny Airlines]] and successor [[USAir]] and then began operating [[Northwest Airlink]] service on behalf of [[Northwest Airlines]]. The initial move consisted of the Fischer Brothers management team (including Vice President of Operations Armando Cardenas, Chief Pilot Mark Zweidinger, Vice President of Customer Service Mark Fisher, Director of Maintenance Craig Anderson and Personnel Manager Cynthia Baldwin) and was led by Midway Airlines executive Richard Pfennig. Offers of employment were extended to the pilots and maintenance team that wanted to relocate. Gordon Jones, Vice President of Maintenance and Jerry Turpstra, Chief Inspector joined the management group in June 1987. Mr. Pfennig took control of the operation and was able to quickly get the company through certification flights. In May 1987 the commuter started scheduled passenger flights. The initial operation consisted of 21 employees, the original seven [[Dornier 228]] turboprop aircraft and eventually ended with 125 employees, 28 Dornier aircraft and 13 [[Embraer EMB-120 Brasilia]] turboprop aircraft. Midway Connection operated to cities in the Midwest states, including Wisconsin (Milwaukee, Madison, Green Bay, Oshkosh), Michigan (Traverse City, Grand Rapids, Muskegeon, Lansing, Kalamazoo), Indiana (South Bend, Ft. Wayne, Indianapolis, Lafayette), Illinois (Bloomington, Champaign, Moline-Quad Cities, Peoria and their home base Springfield, Illinois), and Ohio (Toledo). This Midway Connection service was a wholly owned subsidiary of Midway Airlines, and although it was an independent operation, it was completely operated as a "feeder" for the "mainline" operation via a [[code sharing]] agreement. Dispatch and Maintenance for the airline was conducted in Springfield, Illinois, while reservations were supported through Midway Airlines in Chicago utilizing the SABRE reservations system.

 

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[[Category:Airlines established in 1976]]

[[Category:Airlines disestablished in 1991]]