The end (again) of Midway Airlines?

Twice-failed Midway Airlines — so named because it was originally based at Midway airport in Chicago, which it no longer even serves — may face liquidation.

In its second incarnation, it became a Raleigh-based carrier. It had a frequent flyer relationship with American Airlines after American abandoned its Raleigh hub. But Midway was unable to survive.

It was in bankruptcy even before 9/11. It ceased operations afterward and resumed only when the federal government handed out bailout funds.

Finally it adopted a new business model as a USAirways Express carrier. The deal with USAirways requires it to emerge from bankruptcy by October 31st. USAirways holds a significant claim on assets which it does not want to give up. So Midway is having a hard time attracting the funds necessary emerge from Chapter 11, since its potential funder wants a claim on those same assets.

Ultimately, the players involved don’t seem to think that Midway has a better chance of paying off debts as an ongoing enterprise than it does simply by selling off assets.

A sad, although probably correct, position to be in. A decision on the fate of Midway may be made this month.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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