The Latest Casualty

Travel may have picked up since the guns stopped firing five weeks ago, but Saddam Hussein's war is still claiming victims. Chicago-based Midway Airlines, its strength sapped over the winter by the war-induced spike in fuel prices and slump in travel, flew into the shelter of Chapter 11 bankruptcy protection last week, joining recent arrivals Continental Airlines and Pan Am (with TWA circling overhead). Midway's jets continue to fly, thanks in part to a $40 million loan from Continental Bank, which will be first to be repaid if the airline fails in its attempt to reorganize.

Saddam Hussein was not Midway's only problem: the airline hobbled itself in 1989 by agreeing to pay Eastern Airlines more than $100 million for a hub in Philadelphia. But with a deepening recession, fuel prices that more than doubled with the gulf crisis and cutthroat competition in the Northeast corridor, Midway was forced to retreat and put its Philadelphia gates back on the block last year. The company ended up selling those operations to USAir for only $64.5 million. Mainly as a result of that sale, Midway posted a $139.2 million loss last year. Yet with completion of the sale expected next month, Midway chairman David Hinson insists "the worst is now behind us." In light of the fare-cutting mania that has recently gripped air carriers, Midway's 5,700 employees can only hope he is right.