NORTHWEST AIRLINES ISSUES STATEMENT ABOUT MIDWAY
NORTHWEST AIRLINES ISSUES STATEMENT ABOUT MIDWAY CHICAGO, Nov. 15 /PRNewswire/ -- The following statement from
Northwest Airlines regarding Midway Airlines will be issued today at a 3:30 p.m. news conference in Chicago hosted by Joe Leonard, Northwest executive vice president-customer service, and Mark Abels, Northwest vice president-corporate communications and promotions.
Statement by Joseph E. Leonard Executive Vice President-Customer Service Northwest Airlines, Inc. Five weeks ago Midway Airlines approached Northwest with an urgent request for cash to maintain operations. At the time Midway Airlines informed Northwest that they had run out of funds and were within days or even hours of closing down operations and turning their employees out into the street and that no one else was willing to help them. Northwest responded with a $20 million cash commitment (plus a $4.7 million payment to the city of Chicago) to keep Midway flying. In exchange for this payment Northwest received leaseholds on Midway's 21 gates at Midway Airport, gates we immediately leased back to Midway for operations. As a result of this cash infusion, Midway was able to continue operations and keep paying its people while a last-ditch effort to save the airline could be pursued. We also agreed to negotiate a total acquisition of Midway, subject to due diligence and board approval. For reasons we detailed earlier this week, Northwest in its review determined that the Midway Airlines system was well beyond saving financially by Northwest or, we would estimate, any other airline. We thus advised Midway that we would not complete the acquisition. Midway Airlines since has ceased operations. We now face the challenge of maintaining service at Chicago Midway Airport. Specifically, we must determine the use of the 21 former Midway gates. It is not and has not been Northwest's intention to retain possession of all of these gates except in connection with a total acquisition of Midway. As we stated when we announced the termination of the Midway acquisition, we intend to make these gates available to other airlines. We are offering the gates for sale to actual users at no profit. Our goal, a goal we believe is shared by the city of Chicago, is to restore a maximum level of airline service to Midway airport as completely and quickly as possible. This is in everyone's best interest. To make this happen, we must work together. Accordingly, we have contacted all of the domestic airlines serving Chicago as well as the city of Chicago and have invited them to meet with us at 2 p.m. Monday at the law offices of Jenner and Block in Chicago. At this meeting we will discuss the status of the gates and solicit offers for their use. We hope that by bringing all prospective operators together around one table we can complete the process of reuse of the gates within a matter of a few days. In our effort to keep Midway flying and keep Midway employees working, we invested nearly $45 million. This investment was secured by gate leases. In disposing of the gate leases, we hope to recoup the $25 million we advanced for the gate leases. We want to make it clear that we have no interest in profiting on the Midway collapse and we will seek to sell these leases for no more than we paid for them. Should Northwest receive any profit, we will donate those funds to a trust fund for the benefit of the unemployed former workers of Midway Airlines. We will retain one additional gate for our own use in addition to the two gates we already operate. Northwest will add numerous flights to our Midway Airport service during the next six weeks, including hourly non-stop service between Midway Airport and the Twin Cities of Minneapolis and St. Paul and three additional daily flights between Midway Airport and Detroit. Northwest is saddened by the failure of Midway Airlines. At a time when all other airlines declined to help Midway Airlines any further, Northwest risked a considerable amount of money to keep Midway flying past Oct. 10 and hundreds of our people worked extremely hard to bring an acquisition of Midway assets to fruition. Unfortunately, Midway was not in a position to succeed or survive, and our goal now is to restore service at Midway Airport and to improve the airport. The key to this is cooperation among all of the airlines and the city, and we will do our best to create that cooperation. -0- 11/15/91 /CONTACT: Northwest Corporate Communications, 612-726-2331/ CO: Northwest Airlines ST: Minnesota IN: TRN SU: AL -- MN011 -- 1699 11/15/91 16:20 EST
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|Date:||Nov 15, 1991|
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