Midwest Express Suspends 328JET, B1900 Payments

 - January 22, 2008, 11:57 AM

Milwaukee-based Midwest Express last month suspended lease and debt payments on 38 of its 58 airplanes, including several Fairchild Dornier 328JETs and Beech 1900s flown by its wholly owned regional subsidiary, Skyway Airlines. The company plans to withhold roughly $9.5 million in scheduled payments through June 7, by which time it will default on its bank credit agreement and “other obligations.” As of March 14 holding $31 million in unrestricted cash, Midwest Express hopes to save as much as $4 million a month by renegotiating its payment schedules and interest rates with lessors and creditors.

On March 13 company executives met with lessors and debt providers to present a restructuring proposal. Midwest Express senior v-p and CFO Robert Bahlman said that the parties engaged in “meaningful discussions,” and that the company hopes to reach a mutually satisfactory resolution in “due course.” In the meantime, he said, the company continues to pay other financial obligations in full and on time.