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Midway set to fly again
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December 19, 2001: 1:19 p.m. ET
Bankrupt carrier resumes limited flights; some big airlines recall employees.
By Staff Writer Chris Isidore
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NEW YORK (CNN/Money) - Midway Airlines started flying again Wednesday for the first time since the nationwide halt of air travel immediately following the Sept. 11 terrorist attack, a sign of the slowly improving market for air travel and the effect of the federal $5 billion industry bailout.
Midway already had been operating in bankruptcy protection even before the attack. On Sept. 12 it announced what appeared to be a final suspension of operations as other airlines were preparing to resume flights.
The company said then it didn't have the resources to reorganize in the face of the sharply depressed demand for air travel.
"We were hopeful [a resumption of flights] would happen," airline spokesman Robert Ferguson said. "I don't think we had a specific assessment of what the odds were."
But the company received $10.1 million in direct aid from the federal government in the industry-wide bailout, and it expects to receive another $2 million when final distributions are made early next year. That assistance and a recovery in air traffic to about 80 percent of pre-attack levels for the industry overall give Midway hope it will be able to make a go of it this time.
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Bankrupt carrier Midway Airlines plans to resume flights Wednesday for the first time since Sept. 11. | |
Ferguson said demand is strong for tickets that start with a promotional fare of $49 one-way for travel completed by Feb. 10. Its flights connect Raleigh-Durham, N.C., with Fort Lauderdale, Tampa and Orlando Fla., and Boston, Newark, N.J., and New York's LaGuardia Airport.
"The first flights will go off about 80 percent full," he said Tuesday. "With the promotional fares, we're selling more tickets over the holidays than we have seats."
But it's a smaller Midway Airlines that resumes operation. Initially it has about 250 employees with 6 planes flying 18 flights a day, with plans to have 24 flights a day by late February. Before the attack it had 1,700 employees handling 120 flights a day using 23 aircraft. The carrier still is operating under bankruptcy court protection, and has yet to decide whether to seek federal loan guarantees available under the bailout legislation.
Fewer job cuts than expected at major carriers
Midway isn't the only airline seeing some of the jobs lost in the immediate wake of the attacks coming back sooner than expected.
Several major airlines have reduced the number of jobs they expect to cut and even started to recall some employees furloughed in late September. But it has been greater staffing needs, not improved business, mitigating the effects of the earlier job cut announcements at the major carriers.
American Airlines, a unit of AMR Corp. (AMR: unchanged at $22.50, Research, Estimates), the largest airline company, announced Wednesday it is recalling 800 customer service representative to 10 call centers around the country, due to longer-than-expected calls by customers concerned about security procedures and a change in mix between leisure and business travelers. American had announced 20,000 layoffs in the wake of the attacks.
The move is similar to an earlier recall by Northwest Airlines (NWAC: down $0.47 to $15.83, Research, Estimates), the nation's No. 4 carrier, of several hundred customer service representatives. Northwest also recalled some seasonal ground service employees needed to deice planes, and now says increased training requirements for pilots on aircraft they were not flying previously will reduce pilot furloughs by 300.
Continental Airlines (CAL: up $0.07 to $24.09, Research, Estimates), the nation's No. 5 carrier, was the first to announce layoffs, totaling about 12,000 employees, or 20 percent of its work force. Today it says it should be able to get by cutting only 8,000 jobs, with about half of those affected leaving voluntarily under various program offered by the Houston-based carrier.
The staffing demands caused by more stringent security measures and a freeze on open positions allowed the one-third reduction in job cuts at Continental. The airline also has had a "modest" recall of furloughed employees.
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America West Airlines (AWA: up $0.03 to $2.70, Research, Estimates), the nation's No. 8 carrier, also has recalled some of 70 furloughed employees, mostly flight attendants and customer service employees needed for new security procedures.
Overall, nearly 100,000 job cuts were announced at the nation's major airlines immediately after the attack. But the Air Transport Association said it now believes that only 80,000 involuntary job cuts will be implemented, with the voluntary separation agreements reducing the number of involuntary cuts. 
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