Airline Industry Analysts Say Midway's Lofty Goal May Be Out Of Reach
Posted November 7, 2001
RALEIGH, NC — Midway Airlines has until next week to apply for a second round of federal airline relief money in its effort to restart the bankrupt airline, but questions remain about whether the lofty goal of flying again is reachable.
People who follow the airline industry say Midway does have the physical and human capital needed to get back on the runway again. They say they doubt, though, that the company has the financial means.
"I think the terrorist attack on September 11 was just the straw that broke the camel's back," says Steve Lott, the Business Editor of Aviation Daily.
Lott says Midway would need $40 million in federal money just to start up again, in an environment where its industry peers are losing money at a rate of $1 million to $15 million every day.
"The airlines face the biggest crisis in the history of aviation at this point," Lott says. "It's hard to believe that the government would give money to an airline that is not flying and really doesn't have a substantial reorganization plan in place."
UNC Professor John Kasarda has followed the airline industry for 15 years. He says while Midway has a solid plan to re-emerge, it will need passengers paying full fares at a time when there is a fear of flying.
"Even if they get loads of 50, 60, 70 percent, if those are with deeply discounted airfares, they will not have sufficient revenues," Kasarda says.
Still, B.J. Riesland is optimistic. Riesland is a former flight attendant with Midway who has led a drive to gather 2,700 signatures urging Congress to help Midway Airlines fly again.
She says passengers want the company to fly again.
"They want us back. They miss us desperately. And I have every confidence that we'll do it," Riesland says.
She believes Midway would have no problem rounding up planes, gate space and personnel, either.
"We're trained," she says. "We can come back at a moment's notice."
Kasarda says Midway's ace in the hole could be chief executive Bob Ferguson, who helped Continental Airlines emerge from bankruptcy in the early 1990s. Ferguson declined to be interviewed, as did Jim Goodnight, Midway's largest investor and the founder of SAS.