Air Transport World

Midway Airlines: one of the survivors; after trying no-frills and Metrolink and flirting with bankruptcy, it has now found a profitable niche as an "airline airline". (Midway Airlines Inc.)

Midway Airlines: One of the survivors

Midway Airlines has undergone an uncommon number of personality changes during the eight years since it launched no-frills service from Chicago's dormant Midway Airport in November 1979, but its schizoid days may finally be over. Today, Chairman and CEO David R. Hinson says, Midway is simply "an airline airline' whose mission is to provide "a good service for a reasonable price.' And the strategy he laid out when he was called upon on Feb. 15, 1985, to save the carrier is paying off with record profits.

Hinson, 53, a successful Oregon businessman and former Northwest and United pilot who was one of Midway's original investors and has sat on its board since its birth, is the man who came up with a plan to stave off the bankruptcy that appeared imminent after net losses of $15 million in 1983 and $22 million in 1984. The board ousted Chairman Arthur C. Bass and President Neal Meehan when the 1984 results came in and gave Hinson the task of rescuing the last jet airline certificated prior to deregulation.

Midway change complete

Hinson thereupon set out to restore profitability, reorient Midway back into the unique niche it enjoys by having its hub at Chicago's close-in Midway Airport and embark on "prudent' growth. On his first day in his new post he lopped off 10% of the work force, imposed a temporary wage freeze on the remainder, halted money-losing service to Newark, Milwaukee and Topeka, took the carrier's two leased McDonnell Douglas MD-81s out of service (they were soon subleased to PSA, who bought them at the end of 1986), and suspended a number of capital expenditures. In April 1985 he scrapped the Metrolink concept via which Bass had created the industry's first all-business-class airline and began boosting capacity by converting the McDonnell Douglas DC-9 fleet back to dual-class. "Metrolink was too focused,' he says. "It excluded 55% of the market and you can't do that and survive.'

That July, Hinson completed the Bass-initiated purchase of the assets of bankrupt Air Florida and eliminated the separate Midway Express name under which no-frills service to Florida and the Caribbean was then operated. (Though the Air Florida acquisition is regarded as one of Bass's best moves, his creation of two airlines with similar names but conflicting service philosophies caused considerable confusion among potential customers.) By September, with load factors soaring, Hinson was able to declare he was "no longer worried whether this airline is going to survive.'

This year has seen completion of the transformation into the "new' Midway. The carrier spent $7 million to reconfigure its 16 DC-9-30s and nine DC-9-15s with, respectively, 115 and 83 single-class Fairchild-Burns seats (its ten 128-seat Boeing 737-200s have always been single-class). The money also paid for a striking new Dave Ellies-designed red-and-white livery with a bold "Midway' splashed across the forward fuselage. "I wanted to be able to stand in the terminal and read the name on an airplane at the end of the runway,' Hinson told ATW.

Additionally, on the strength of its record 1986 net profits, Midway has launched a major expansion keyed to turning its home airport into a true connecting hub by adding western spokes to its route network, placing increased emphasis on leisure markets and initiating a feeder service. The first westward move as to Las Vegas in July 1986, and in the first half of 1987 service began to Denver, Phoenix, Atlanta, Des Moines and Omaha as five of nine DC-9-30s purchased from KLM Royal Dutch Airlines and a new 737 joined the fleet. …

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