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Midway Airlines halts flight operations, cites terror attacks; 1,700 employees out of work

© Associated Press

Midway Airlines, citing the impact of Tuesday's terrorist attacks on its already precarious financial situation, said Wednesday it was suspending all flight operations.

Some 1,700 employees were immediately put out of work, the airline said.

The airline, which filed for Chapter 11 bankruptcy Aug. 13, referred to the hijackings and targeted airplane crashes in New York and Washington, which resulted in a nationwide shutdown of air travel.

Midway had been flying six flights out of Tampa International Airport until the bankruptcy filing, when the airlined trimmed its local flights to three.

The company said in a statement that the action was being taken "with the recognition that, following the recent terrorist attacks, demand for air transportation is expected to decline sharply."

"We are deeply troubled by the impact this action will have on our customers, employees, creditors and community. Unfortunately, we simply do not have the resources necessary to permit us to reorganize in this environment," the statement said.

Midway has blamed its financial problems on a sudden fall in business travel and increased competition. The airline had also purchased new airplanes and expanded its routes.

The company posted losses of $15 million in 2000 and another $15 million in the first six months of this year.

After declaring Chapter 11 bankruptcy proceedings, the company discontinued service to nine destinations and grounded 17 aircraft.

The company said ticketholders would be entitled to refunds or transfers to other airlines. The laid-off Midway workers would receive final paychecks on their next scheduled payday.

Midway said it would begin returning aircraft to their lessors and will try to sell other assets in order to pay its debts.

The company had earned a bankruptcy court judge's permission to borrow as much as $15 million to keep operating and pay some 700 employees who had already been laid off.

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From the Times wire desk
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  • From the AP
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