Midway Airlines Announces Restructuring
Midway Airlines Announces Restructuring
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Raleigh-Durham, NC - August 14, 2001 - Midway Airlines today announced
that, in connection with its filing for relief pursuant to Chapter 11 of
the US Bankruptcy Code, it would reduce its workforce by approximately
50 percent, reduce its fleet by 17 aircraft and discontinue service to
nine destinations. The instant need for this restructuring has been occasioned by the calamitous
drop in business traffic experienced by airlines generally this year and
by Midway Airlines in particular in the technology rich Raleigh/Durham,
N.C. area. The decline in business traffic has been exacerbated by the
dramatic slowing of traffic growth at Raleigh Durham International Airport
and the generally lower fare levels that have recently prevailed. Further
compounding these revenue-related issues has been the company's rapid expansion
and consequent dependence upon continuing increases in demand, and finally
the stubbornly high prices of jet fuel.
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"Despite economic conditions that have made a portion of our route network
unprofitable and unsustainable, we are confident we will return to profitability
by reorganizing and reducing our route network to traditionally profitable
routes," said Robert Ferguson, president and CEO.
This restructuring will have a number of effects as follows: Midway
will cease operating all four of its F100 aircraft and thirteen of twenty-four
CRJ aircraft. Midway will continue to operate its twelve 737-700 series
aircraft and eleven Canadian Regional Jets. Midway will discontinue service
to: Buffalo, NY; Dayton, OH; Pittsburgh, PA; Rochester, NY; and Washington,
DC - Dulles effective August 14, 2001. Service to Los Angeles, CA will
be discontinued effective August 19, 2001. Service to Birmingham, AL will
be discontinued effective August 20, 2001. Finally, service to Providence,
RI and San Jose, CA will be discontinued on August 31, 2001.
Midway's workforce is being reduced by nearly 700 employees effective
immediately. This reduction includes approximately 183 pilots, 99 flight
attendants, 91 customer service agents (ticket and gate functions), 126
fleet service agents (baggage handlers) and 201 other personnel. As of
June 30, 2001, Midway had total assets amounting to $318 million and total
liabilities amounting to $232 million as reflected in accordance with generally
accepted accounting principals and assuming Midway is a going concern.
For the three months and six months ended June 30, 2001 Midway experienced
net losses of $7 million and $15 million respectively.