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.