Milwaukee, Wisconsin, September 12, 2002 å- Midwest Express Holdings, Inc. (NYSE: MEH) å- the holding company for Midwest Express Airlines å- today said it expects third quarter earnings to be lower than analystså’ projections reported by First Call. The company estimates a third quarter loss of $0.50-$0.60 per share, compared with a loss of $0.22 in third quarter 2001. (Third quarter 2001 results included non-operating income of $8.3 million, or $0.38 per share, associated with the Air Transportation Safety and System Stabilization Act.)
A rapid decline in the industry earnings environment - including increasing fuel prices, declining business fares and lower business travel demand - resulted in the lowered earnings projection following a profitable second quarter, according to Timothy E. Hoeksema, chairman and chief executive officer. However, he said the company is taking immediate action to identify where revenue can be improved and costs reduced.
Hoeksema said the company’s cost-reduction efforts are focusing on four areas:
á Schedule modifications. The airline will implement a significant schedule change on November 1 that will increase service as previously announced in some markets, eliminate or shift service in others, and reduce capacity in yet others.
á Cost reductions. The airline is conducting a comprehensive review of its onboard service to determine if modifications can be made that will reduce costs while continuing to provide the service differentiation Midwest Express is known for. Additionally it is renegotiating contract agreements with vendors and suppliers, and reviewing costs companywide to determine where cost-reduction programs can be implemented.
á Sale of aircraft. As part of the November schedule modifications and long-term transition to Boeing 717 aircraft, Midwest Express will move up the sale of two company-owned DC-9 aircraft that are currently in service. The airline has signed a letter of intent to sell one aircraft in mid-October and another in early December.
á Workforce reductions. The workforce will be reduced by 200-250 employees systemwide by the end of the year, through a combination of attrition and furloughs.
Midwest Express Holdings, Inc. is the holding company for Midwest Express Airlines, a premium-service airline headquartered in Milwaukee. Midwest Express Airlines features nonstop jet service to major destinations throughout the United States. Astral Aviation, Inc. - its wholly owned subsidiary - operates Skyway Airlines, The Midwest Express Connection, which offers connections to Midwest Express as well as point-to-point service between select markets on regional jet and turboprop aircraft. Together, the airlines fly to 51 cities.