Aerial Dogfight

Midway takes on the majors

The nation's airlines are already exhibiting some of the effects of deregulation that may eventually show up in the trucking industry. Like an army of gnats, regional and commuter airlines are swarming over travel routes that were once the exclusive preserves of such major airlines as TWA. Delta and United. Feisty lilliputian lines are vying not only for the majors' abandoned routes but also for their profitable main intercity runs.

With bare-bones overhead and sharply discounted fares, some of the puddle jumpers are emerging as profitable winners. For example, while the giants were fighting over the Florida market last winter with costly promotional gimmicks, huge advertising campaigns and discounts to travel agents, tiny Air Florida ferried passengers for sharply reduced fares in planes that were 85% full. This contributed to earnings of $1.4 million from February through April, a period during which most majors had losses.

Among the most successful new regional carriers is Chicago's Midway Airlines, launched last November in the nearly abandoned Midway Airport. The line promoted its proximity to downtown Chicago (eight miles from the Loop, vs. 22 miles for competing O'Hare) with a pair of sexy, ruby red lips and the slogan "Kiss O'Hare Goodbye. Jet Midway Airlines." Many travelers did just that. In its first seven months. Midway flew 190,000 passengers and rang up $7.3 million in revenues.

The K Mart of the skies. Midway takes the plain pipe rack approach to flights between Chicago and Detroit, Cleveland, Kansas City, St. Louis and Washington. Founder and Chairman Irving Tague, 52, the former head of San Francisco-based Hughes AirWest, got the line aloft by leasing three ten-year-old DC-9 jets from TWA and daubing them with rainbow colors. Uniforms for flight attendants came off the peg rather than being designer-made. No meals are served aloft, yet drinks are a bargain at $1 each. Midway's nonunionized ticket agents cheerfully help load bags or straighten up the departure lounge when necessary. But the real attraction is the fares: 30% to 50% below normal coach rates.

The major lines, though, are beginning to take notice of the roaring mouse. When Midway announced $44 tickets between Chicago and Minneapolis, Northwest immediately cut its fare by as much as $52 to match the price, and taxied up four daily flights.

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