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U.S. Midway Air Files for Bankruptcy
U.S. Midway Airlines filed for bankruptcy protection, reduced its flight schedule and announced plans to lay off more than half its employees as it seeks to preserve cash while it reorganizes its finances to cope with a severe downturn in corporate travel.
Company president Robert Ferguson said Tuesday that Midway is exploring partnerships or a possible sale of the company.
Midway blamed its troubles on a ``calamitous drop in business traffic,'' low fares and high jet fuel prices. Some of Midway's biggest business customers in the tech-heavy Research Triangle Park area cut travel by as much as 90 percent because of the economic slowdown.
``The only way I would describe it is hideously disappointing,'' Ferguson said.
The North Carolina-based airline filed its papers with the bankruptcy court Monday night and began calling some 700 employees, including 189 pilots, whose jobs were cut. A second wave of cuts is expected in December. The airline also canceled shipment of new jets, including one due to arrive this week, and mothballed 17 of its 51 aircraft.
Ferguson said Midway would try to regain the profitability by cutting unprofitable flights and concentrating on routes that were moneymakers. Under the new structure, the airline will run 130 trips a day instead of 230.
The company has $25 million in cash and will seek partners, including possible acquisition, to raise money for continuing operations, Ferguson said.
Flights to five cities were canceled starting Tuesday, while many others were disrupted.
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