BY BILL WASSERZIEHER


Midwest Express, a long-time favorite with business travelers, has a new name, Midwest Airlines, and a new flagship aircraft, the Boeing 717.

The Milwaukee-based airline formally inaugurated the new name on March 1 after taking delivery of its first 717 during a ceremony at the Boeing facility in Long Beach, Calif., the previous day.

The gleaming new 717, the 116th to come off of the Long Beach assembly line, is the first of 25 on firm order for Midwest Airlines, with the carrier scheduled to receive its future airplanes at a rate of one per month into 2005. Midwest also holds options for an additional 25 of the advanced twinjets.

The airline joins AirTran Airways, Hawaiian Airlines, Aerolineas Baleares, Turkmenistan Airlines, Olympic Aviation, QantasLink and Bangkok Airways as operators of 717s.

Midwest Airlines Chairman and CEO Timothy Hoeksema spoke Feb. 28 to a cheering crowd of Boeing and Midwest employees gathered for the ceremony in Long Beach.

"This is an important day for our airline as we accept delivery of our first Boeing 717 and officially change our name to Midwest Airlines," Hoeksema said. "These events play a crucial role in our plans for the future."

Midwest, like nearly all U.S. airlines, remains in recovery mode following the triple assault of the terrorist attacks on Sept. 11, 2001, the temporary grounding of all U.S. airlines and the subsequent downturn in world travel. Add the upward trend in fuel costs, and Midwest suffered a net loss of $10.6 million, or 72 cents per share, in 2002.

But its load factor—percentage of seats filled—is headed back toward a figure in the mid 60s, and its revenue-passenger-miles continue to rebound. The arrival of the Boeing 717 is expected to produce major savings as more of these airplanes enter the current Midwest fleet of 34 DC-9s and MD-80s.

"As the 717s are integrated into our fleet, their advanced technology, improved reliability, fuel efficiency and low maintenance requirements will significantly reduce our operating costs—particularly important in these challenging times for our industry," Hoeksema told listeners on delivery day.

Midwest's chief executive also cited the 717 fleet dispatch average of better than 99.4 percent as a crucial factor in choosing the Boeing twinjet over competing models that other airframe manufacturers in the 100-seat category offer.

As part of its fleet renewal program, Midwest Airlines also has signed a long term $95 million contract with Rolls-Royce PLC to provide in-service support for the BR715 engines that will power its new fleet of Boeing 717s.

Kurt Jensen, director of Market Development for Rolls-Royce North America, spoke enthusiastically of the extended contract at the delivery ceremony.

"These new planes with our engines use a lot less fuel," Jensen said. "I think the only people who aren't happy about them are those folks with oil wells in their backyards."

Midwest's 717 will burn significantly fewer gallons of jet fuel per hour compared to its older-generation airplanes and will provide approximately 25 percent savings at a time when jet fuel prices have climbed by more than 50 percent in the last year.

Midwest Airlines began service in 1984 as a subsidiary of K-C Aviation, a division of Kimberly-Clark, the giant paper products company which began providing corporate air transportation in 1948 for executives and engineers traveling between its Appleton, Wis., headquarters and its mills across the United States.

Opting to become a commercial carrier following the landmark Airline Deregulation Act, the airline started with five used Douglas DC-9 series 10 aircraft, including the second one ever built—which first flew May 8,1965—and, remarkably, remains in revenue service to this day. As Boeing Commercial Airplanes President and CEO Alan Mulally said during a recent Excellence Hour, "Douglas made very rugged airframes."

As the former Midwest Express's route structure expanded during the subsequent decade, the airline added more DC-9 series 10s and 30s, followed by MD-80s starting in late 1997. The airline entered the new century flying on the wings of an all-Long Beach-built fleet.

As it has grown, Midwest has developed a reputation for offering exemplary service, with numerous laudatory reviews in Condé Nast Traveler, Zagat Survey and Consumer Reports to prove it. And most recently, OAG, publishers of the Official Airline Guide, named Midwest the "Best Economy/Coach Class Airline" in the world; and Travel+Leisure magazine recognized Midwest as the "Best Domestic Airline" in 2002—the fourth time in the last six years.

In keeping with its commitment to passenger comfort, the new Midwest 717s will be configured at 88 seats, rather than the baseline 106, and will feature two-by-two seating on each side of the aisle. All Midwest seats, built by custom provider Recaro, are leather from the headrests to the footrests. The airline also is famous for using glass and china tableware and serving freshly baked chocolate chip cookies prepared onboard.

Midwest Airlines features nonstop jet service to destinations throughout the United States and operates major facilities in Milwaukee, Omaha, Neb., and Kansas City, Mo., Skyway Airlines, a wholly owned subsidiary, also operates Midwest Connect, which offers connections to Midwest Airlines as well as point-to-point service between select markets on regional jet and turboprop aircraft. Together, the airlines offer flights to more than 50 cities.

The company also recently announced it will launch a third operation, a low-fare service designed for such leisure-market destinations as Mexico and other warm-weather locales. Midwest expects to begin operations at the as-yet-unnamed branch in the third quarter of 2003 using five MD-80 airplanes already in the fleet to offer low-fare service.

Adding this low-fare arm to Midwest's existing service will allow the airline's parent company to enhance its competitive position by serving a segment of the market that is growing more rapidly than business travel.

"We'll be able to expand to destinations that have not been economically viable to serve with our premium product and serve some existing destinations more cost efficiently," Hoeksema recently told analysts.

What won't change, he said, is the company's overriding commitment to providing the "best care in the air"; and now with the 717 Hoeksema said he believes "we have the best aircraft" for long-term growth and success.

william.e.wasserzieher@boeing.com