- The Washington Times - Wednesday, August 15, 2001

MORRISVILLE, N.C. (AP) — Midway Airlines filed for bankruptcy protection, reduced its flight schedule and laid off half its employees to preserve cash while it reorganizes its finances to cope with a severe downturn in corporate travel.
Company President Robert Ferguson said yesterday that Midway is exploring partnerships or a possible sale of the company.
Midway blamed its troubles on a "calamitous drop in business traffic," low fares and high jet-fuel prices. Some of Midway's biggest business customers in the tech-heavy Research Triangle Park area cut travel by as much as 90 percent because of the economic slowdown.
"The only way I would describe it is hideously disappointing," Mr. Ferguson said.
The North Carolina-based airline filed its papers with the bankruptcy court Monday night and began calling some 700 employees, including 189 pilots, whose jobs were cut. The airline also canceled shipment of new jets, including one to arrive this week, and mothballed 17 of its 51 aircraft.
Mr. Ferguson said Midway would try to regain the profitability by cutting unprofitable flights and concentrating on routes that were moneymakers. Under the new structure, the airline will schedule 130 trips a day instead of 230.
The company has $25 million in cash and will seek partners, including possible acquisition, to raise money for continuing operations, Mr. Ferguson said.
Flights to five cities were canceled starting yesterday, while many others were disrupted.
Jim Hodge of Norfolk, Va., was traveling from a trade show in Denver with his father when their trip stopped at Raleigh-Durham International Airport. They were booked on Midway's Corporate Airlines commuter flight to Norfolk, which was delayed at least three hours.
"I think the best call is to use anything else whether it takes all day or not," Mr. Hodge said. "I'd drive to Norfolk if they'd just rent a car for me."
Other travelers were happier, such as Jim and Vicky Ball of Roper, N.C. They were transferred to a US Airways flight to New York, where they were headed to see their daughter, a cadet at the U.S. Military Academy at West Point.
"[Midway] had a flight later tonight, but they routed us through Philadelphia on U.S. Air and gave us a $100 travel voucher each," Mr. Ball said. "They were very nice."
Wendi Huskins, 22, who finished flight-attendant training in June, and her roommate, Rachel Poe, were among the 99 flight attendants who lost jobs. The distraught pair hugged a senior flight attendant outside a room where layoff notices were being dispensed at Raleigh-Durham.
"We loved every minute of it," Miss Huskins said. "It's really such an unfortunate situation. I had no clue when I got into this company that anything like this was coming at all.
"They said they were going to hire 500 new attendants. We thought our jobs were golden."
More layoffs are expected by December as the company cuts its payroll from 2,250 to 1,000 full-time equivalent jobs. Midway anticipated 50 more pilots would be laid off.
Flights dropped as of yesterday were to Buffalo and Rochester, N.Y.; Dayton, Ohio; Pittsburgh; and Washington Dulles International Airport. Service to Los Angeles will be dropped Aug. 19 and service to Birmingham, Ala., will be discontinued Aug. 20. Service to Providence, R.I., and San Jose, Calif., will be dropped on Aug. 31.
Midway said it will maintain service to 19 other destinations, though only Ronald Reagan Washington National Airport will keep its current number of flights.
For the quarter ending June 30, Midway had losses of $7 million. The airline lost $15 million in the past six months.
As of June 30, the company had $318 million in assets and liabilities of $232 million, the company said.
Trading in shares of Midway were halted by the Nasdaq Stock Market early yesterday. On Monday, shares closed at $2.75.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide