Troubled Midwest Airlines is toiling to avoid bankruptcy. After grounding its fleet of MD-80s, the carrier still needs to come up with a way to avoid a complete shut-down--and it's not looking good.
CEO Timothy Hoeksema is asking some employees to take a 65 percent pay cut and says the situation is "critical." Midwest may also park some of its 717s, further trimming the carrier's already small fleet.
The bigger trouble with all this is that no sensible person would buy tickets on the tanking airline, which of course hurts Midwest even more. Passenger numbers so far this year are already down nine percent compared to the same period last year. Cutting more flights certainly won't get bookings up--and neither will the specter of imminent bankruptcy.
Yet another airline will be parking planes this summer. This time it's Midwest Airlines, of baked-in-flight chocolate chip cookies fame. The Milwaukee-based carrier says it simply can't afford to fly its fuel-inefficient MD-80s any longer.
While we're only talking about 12 planes, that's a significant chunk of Midwest's fleet. The airline hasn't yet decided what to do: Scratch some routes or eliminate some non-stop service. Undoubtedly, there will also be job cuts.
The only good news is that the remaining 717s are the planes tricked out with 2-by-2 seating. And for now, those cookies are still on the in-flight menu.
American Airlines has just announced that it'll cut capacity by a little more than 10 percent by the end of 2008. That means there will be fewer seats available, and the move will also let AA sell off about 40 planes. (You guessed it: Some troublesome MD-80s are on the auction block.)
Undoubtedly, the carrier hopes that the cuts will lead to higher fares--and lower fuel bills. But that'll only happen if other airlines play along. Deep-pocketed rivals (Virgin America?) may see this as a chance to knock American out of certain markets, though we doubt AA would be foolish enough to cut service on ultra-competitive routes like LAX-JFK, even if they are money-losers.
Oh, and hidden deep within the press release about the capacity cuts is the announcement of a $15 fee for your first checked bag. Something tells us mimicking Ryanair won't keep you on the top of passenger satisfaction surveys.
So it's not just the brand new planes that are sitting on the tarmac. American Airlines continues to keep truckloads of its MD-80s grounded as it performs safety investigations on wheel well wiring. The carrier says the hundreds of cancellations are affecting "some" travel.
You can check on your flight by going to AA's status page. You can also set up mobile alerts there, which will ping your phone via SMS or email with any changes to your gate or departure time.
As for when the mess will be sorted out, it's anyone's guess. After nixing about 460 flights yesterday, American has canceled 850 today, though some freshly-inspected MD-80s are already back in service.
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