Air Transport World

No paper airline, despite the Kleenex: Midwest Express is owned by Kimberly-Clark but strict yield management made it profitable in its own right. (Midwest Express Airlines)

No paper airline, despite the Kleenex

Milwaukee--Midwest Express Airlines has a flair for the unexpected Chocolate-chip cookies are served fresh on some of its flights. Its coach passengers, the only kind that it carries, are treated to 2-abreast seating and premium meals such as lobster tail and beef Wellington. Yet amid all these unexpected turns, there is one constant; one bedrock principle to which the airline adheres: Kleenex brand facial tissue in the lavatories.

Kleenex is one of the brands of Kimberly-Clark Corp., you see, and Kimberly-Clark happens to own Midwest Express. The pairing of a relatively small airline with a paper-products giant may seem unlikely but there is logic in the story of the carrier's development.

Kimberly-Clark has had a flight department since 1948, first used to transport logging personnel into remote forests. In 1969, it started up K-C Aviation, which--in addition to operating the Kimberly-Clark fleet--provides aircraft servicing and completion work for corporate clients. In 1982, K-C Aviation began a shuttle service for the parent company, linking corporate headquarters near Appleton, Wis., with Atlanta, site of a large research and development facility, and Memphis. With most of the ingredients for scheduled service on hand and the market-entry freedom provided by deregulation as impetus, Midwest Express was launched on June 11, 1984.

Surviving and prospering

Thus, the surprising part about Midwest Express is not that it came into existence but that it survives and even prospers. In the six years since start-up, most of the "children of deregulation" have met various unkind fates. For example, Air Atlanta and St. Louis-based Air One also had offered first-class amenities at coach prices but both are gone. Midwest Express goes on.

As a unit of Kimberly-Clark, the airline publishes no financial or operating data and the parent breaks out no details of its air operations. But according to reports filed with the U.S. DOT, Midwest Express scored an operating profit of $7.1 million on operating revenues of $98.2 million for the 12 months ended March 31. Kimberly-Clark's operating profit in 1989 was $673.4 million. According to an analysis by First Boston Corp., Midwest Express turned profitable in 1986 and "gains should accrue from Midwest Express as the route structure expands."

Yet some competitors suggest that Kimberly-Clark may absorb some of the costs of its airline subsidiary. While Midwest Express is clearly set up to serve Kimberly-Clark's travel needs, at least in part, officials maintain that the airline is a profit center in its own right. …

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