Midwest Express sees loss, job cuts

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Midwest Express sees loss, job cuts  =

 =


Thursday September 12, 11:22 AM EDT =


(Updates share movement paragraph 5, adds details and background, changes=
 dateline from MILWAUKEE, adds byline)

By Kathy Fieweger

CHICAGO, Sept 12 (Reuters) - Midwest Express Holdings Inc. (MEH), in anot=
her sign of lingering trouble in the U.S. airline industry, on Thursday w=
arned it would lose more money than analysts had expected and said it wou=
ld take steps to reduce costs, including cutting 200 to 250 jobs by year-=
end.

The company, parent of Midwest Express Airlines, said its third-quarter l=
oss would range from 50 cents to 60 cents a share, compared with the aver=
age 23 cents-a-share loss projected by analysts, according to Thomson Fir=
st Call.

Midwest Express Chairman and Chief Executive Timothy Hoeksema in a statem=
ent cited increasing fuel prices, declining business fares and lower dema=
nd for business travel.

  =


In the second quarter, Midwest was one of the few airlines to post a prof=
it, earning $935,000 or 7 cents a share. Its announcement could presage f=
urther deterioration at other airlines.

The airline's stock fell sharply on the New York Stock Exchange, dropping=
 11 percent to a new low of $5.81. It pared losses later in the morning t=
o trade at $6.00, down 8.3 percent.

Midwest Express, a high-service carrier serving U.S. destinations from it=
s Milwaukee hub, said the third-quarter loss stems from a "rapid decline"=
 in the industry earnings environment.

Since the Sept. 11, 2001, hijack attacks, U.S. airlines have lost more th=
an $10 billion and shortfalls of about $6 billion are predicted for this =
year and next year as well.

LABOR DISPUTE STILL ROILING

The airline is also in the midst of a labor dispute with its 450 flight a=
ttendants, who at the end of August said they intended to stage random st=
rikes.

A spokesman for the company was not immediately available to comment on t=
he status of the labor talks.

Other cost-cutting efforts will include a "significant schedule change" o=
n Nov. 1, which will boost flights in some markets but eliminate or shift=
 it in others.

Known particularly among Midwest business travelers for a high degree of =
service, Midwest Express indicated it might be going the route of some bi=
gger competitors by imposing "modifications" to onboard service. It did n=
ot say what those might be.

But other big airlines, struggling with the same environment and mounting=
 financial losses, are starting to charge fees for flying standby and ref=
using to honor nonrefundable fares if they are not used on the day of tra=
vel.

Midwest Express also said it will move up the sale of two company-owned D=
C-9 aircraft. It has signed a letter of intent to sell one in mid-October=
 and one in early December. =



=A92002 Reuters Limited. =


Roger
EWROPS

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