Channel 9

Midwest Update

June 26, 2008 – 7:16 am

Earlier this week I wrote about Midwest Airlines cutting 40% of its capacity by eliminating its MD-80s. Yesterday the Milwaukee Journal Sentinel posted a comprehensive roundup of the continuing restructuring talks. Highlights include:

• Aside from the 12 MD-80s, Midwest will also pull at least 5 of its Boeing 717s. Collectively, this is a 50% fleet reduction.
• In connection with this service reduction, pilot and flight attendant staff will be cut by about 50% also.
• One restructuring scenario calls for junior captains to be demoted to first officer. The resulting pay decrease would be about $90k, from $120k to $30k.

As Midwest continues to tumble three likely scenarios exist:

1. Midwest files for bankruptcy.
2. Midwest is absorbed by the Northwest/Delta merger.
3. Midwest succeeds in its restructuring.

I think #3 is the least likely. For me, it is a coin toss between bankruptcy and the Northwest/Delta merger. Sadly, this spells the end for our favorite cookie baker.