Regionals Update: Midway re-launch delayed until January

 - May 9, 2008, 5:17 AM

Morrisville, N.C.-based Midway Airlines’ plans to emerge from oblivion as a US Airways Express carrier appear to be derailed once again until at least January, while management scrambles to secure the financing needed for its proposed fleet of Bombardier CRJs. The bankrupt airline, grounded since mid-July, hoped to resume operations in October to provide feed for US Airways. The two airlines have now set a new target date of January 15.

Midway ceased operations on July 17 after an unsuccessful attempt to emerge from Chapter 11 bankruptcy protection flying a fleet of five Boeing 737-700s from Raleigh-Durham International Airport. A former regional/national hybrid flying a mix of CRJs, Fokker 100s and Boeing 737s, Midway declared bankruptcy in August last year, shed 13 of its 24 CRJs and all four of its Fokkers, laid off 700 employees and discontinued service to nine destinations. Nearly a month later, 9/11 struck, forcing the airline to cease operations completely on September 12. After receiving $10.1 million in direct government aid, it re-opened on December 19, but some seven months later closed again after signing a deal with US Airways to fly used CRJs as US Airways Express.

Expecting to start code-share services for US Airways to three Northeast cities in October, Midway succeeded in negotiating new labor agreements with its pilots and flight attendants, but failed to secure leases on 18 regional jets and a $5 million security loan for working capital by US Airways’ August 31 deadline. US Airways extended the deadline to October 31 after Midway reached its labor agreements, but at press time it had yet to close the elusive financing deal.

In October a U.S. bankruptcy judge gave Midway until January 30 to issue its plan for emerging from bankruptcy protection. If the airline doesn’t convince the judge of the plan’s viability, the court could convert Midway’s bankruptcy status to Chapter 7 and order its liquidation.