Air Transport World

Midway home. (Midway Airlines Inc. moves operations to Raleigh/Durham International Airport, North Carolina)

Having left Chicago for new digs in Raleigh/Durham, Midway struggles to succeed where American couldn't

After surviving a very difficult winter season, which prompted a fleet and route reduction, the last thing Midway Airlines needed was bad press in the local paper.

The headline screamed: "Midway jet rent falls short." The article recounted what most industry observers already knew: The carrier, which is trying to become a fixture for business travelers here, is struggling at Raleigh/Durham International Airport (RDU). It failed to make rent payments of around $3.6 million on seven of its 12 Fokker 100s from December through February. But landing fees and rent on gates in Terminal C continue to be paid on time and the airline says it has caught up back rent and restructured the leases with debis AirFinance, its principal lessor.

Nevertheless, the news is troubling, coming on the heels of the earlier decision to return all but one of its Airbus A320s to lessors.

The A320s were used on Midway's ill-fated foray into five Caribbean markets. The remaining A320 will be used on Cancun and Las Vegas routes, where the loads have been good, according to the airline. Two of the returned A320s have since been wet-leased to America West.

The low yields generated by the five Caribbean markets coupled with last year's devastating hurricanes are given as primary reasons for the pullout. Some observers blame management for taking a fledgling, money4osing airline into the area at all, considering Americaxl Airlines' strong presence there and the fact that the region is a low-yield market historically. Others credit the airline for curing its losses quickly and regrouping.

Since the winter, Midway also has cut flights to Islip, N.Y., and Jacksonville and Ft. Myers, Fla., as part of an austerity program. But despite the problems, President John Selvaggio remains confident that the airline will succeed, eventually.

"Our financial problems are behind us because we reduced the number of aircraft to leisure markets and cut out unprofitable routes," states Selvaggio, adding: "Spring, summer and fall are expected to be good. December and January will depend largely on the weather."

As for returning the A320s, which were acquired just for the Caribbean markets, "we are too young a carrier to be risking those kinds of losses in leisure markets and [the A320] is an expensive plane to operate," he adds. …

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