Thursday, October 30, 2003 7:01AM EST
Midway poised for liquidation
The airline has canceled flights today, pending the results of a crucial hearing in bankruptcy court, its affiliate US Airways says
By DUDLEY PRICE, Staff Writer
Facing possible court-ordered liquidation today, Midway Airlines is shutting down its operations yet again.
Midway, which flies 30 daily round trips as a commuter feeder for US Airways, "is canceling all flights for Thursday, Oct. 30, pending the outcome of the bankruptcy proceedings" scheduled for this morning, US Airways spokesman David Castelveter said late Wednesday. "US Airways will reaccommodate customers on other US Airways flights or those of other airlines, if necessary."
Customers whose flights are canceled should contact US Airways reservations or their travel agents to be rebooked on other flights.
Whether Midway continues to operate flights as a US Airways Express commuter in the future depends on the outcome of today's bankruptcy court hearing. U.S. Bankruptcy Judge A. Thomas Small could either give the airline more time to come up with a plan to leave bankruptcy or order the carrier's case converted to Chapter 7, which would involve selling the assets to repay creditors.
Meanwhile, Midway, which has halted all flights twice before in the past two years, prepared Wednesday to park its fleet of 50-seat regional jetliners at Kinston's Regional Jetport.
Don Howard, the regional jetport's director of operations, said officials from Morrisville-based Midway notified the airport Wednesday morning that they planned to bring in six to eight regional jetliners sometime Wednesday night. Midway has a total fleet of eight regional jetliners.
"They told the operations manager they planned to bring them in between dark and 1 or 2 a.m.," Howard said. Midway didn't say how long the planes might stay, he added.
Robert Ferguson, Midway's president and chief executive, did not return repeated calls.
Once the Triangle's busiest carrier, Midway has been trying since early this year to reinvent itself as feeder commuter for US Airways. But Midway, which has been in Chapter 11 protection for 26 months, is under pressure from the bankruptcy judge to show it can be a successful operation and leave bankruptcy.
Midway is hoping to exit bankruptcy with a cash infusion of more than $5 million from an unidentified investor that US Airways has lined up. But the investor is insisting that the airline gain contract concessions from its 85 pilots.
Last week Ferguson notified pilots that a deal reached earlier this month had been rejected by the investor.
Discussions on a new proposal began this week and were continuing Wednesday evening. Mark Stewart, a Midway pilot who heads the airline's union chapter, declined to comment on the contract discussions.
According to the latest schedule, Midway has two daily round trips from Raleigh-Durham International Airport to Reagan National Airport in Washington and three daily round trips from RDU to New York's La Guardia. It also operates 25 daily round-trip flights that originate at Reagan National.
Midway, which moved here from Chicago in 1995 to pick up flights when American Airlines pulled out of its RDU hub, has ceased operations before. The first time followed the Sept. 11, 2001, terrorist attacks, a month after the carrier, citing a big drop in business travel, had declared bankruptcy and pared flights.
Midway resumed flights in December 2001 after receiving a $12 million federal airline bailout grant. But it halted flights once more in July 2002. It took to the air again as a US Airways Express carrier on Jan. 1, 2003.