Midwest Airlines, Inc. (MEH) tapped SkyWest Airlines, Inc. (SKWY) to operate 50-seat regional jet service beginning in April 2007. SkyWest will operate a minimum of 15 and up to 25 Canadair regional jets for Midwest during the five-year term of the agreement.

"We chose SkyWest because of their experience, their excellent record of operational performance, and a commitment to customer service that mirrors that of Midwest," Scott R. Dickson, senior vice president and chief marketing officer explained. "We're excited to partner with one of the highest quality operators of commuter aircraft to offer greatly expanded travel opportunities to our customers. We're confident this program will be popular with passengers, and successful for both Midwest and SkyWest."

Under the terms of the agreement, SkyWest will operate up to 25 additional CRJ200 regional jet aircraft. The initial 15 aircraft are scheduled for delivery beginning in April 2007 and continuing through October 2007. The aircraft operated under this agreement will be sourced from aircraft previously delivered in the market with SkyWest Airlines using some of its own CRJ200s. Delivery dates of additional aircraft, if any, will be determined at a later date. The aircraft will serve markets from Midwest's current hubs in Milwaukee and Kansas City and will operate under a capacity purchase agreement, similar to existing SkyWest Airlines' agreements. The agreement provides for an initial term of 5 years with automatic two-year extensions thereafter, unless SkyWest Airlines or Midwest Airlines elects to terminate the agreement.

"SkyWest and Midwest have similar corporate cultures and great reputations for quality customer service and we believe that our partnership will be beneficial for customers, employees, and shareholders," said Under the terms of the agreement, SkyWest Airlines will operate up to 25 additional CRJ200 regional jet aircraft.

The initial 15 aircraft are scheduled for delivery beginning in April 2007 and continuing through October 2007. The aircraft operated under this agreement will be sourced from aircraft previously delivered in the market with SkyWest using some of its existing CRJ200s.

Delivery dates of additional aircraft, if any, will be determined at a later date. The aircraft will serve markets from Midwest's current hubs in Milwaukee and Kansas City and will operate under a capacity purchase agreement, similar to existing SkyWest Airlines' agreements. The agreement provides for automatic two-year extensions, unless SkyWest or Midwest terminates the agreement.

"SkyWest and Midwest have similar corporate cultures and great reputations for quality customer service and we believe that our partnership will be beneficial for customers, employees, and shareholders." said Bradford R. Rich, executive vice president, CFO and treasurer for SkyWest. "This transaction also furthers our strategic diversification objectives by adding an additional partner and creating additional expansion opportunities."

Midwest revealed some of its plans when Dickson indicated both Milwaukee and Kansas City will include the addition of at least six new destinations and as many as 12 new routes. It will also continue to upgrade turboprop markets, with four more cities transitioning to all-regional jet service.

The announcement comes on the heels of two consecutive profitable quarters for Milwaukee's hometown airline - which Dickson indicated were the result of well-executed business and strategic plans that increased passenger traffic 23% and revenue 30% in the first nine months of 2006 compared with the first nine months of 2005.

Skyway Airlines -- Midwest's wholly owned subsidiary operating as Midwest Connect -- offers connections to Midwest Airlines as well as point-to-point service between select markets on regional jet and turboprop aircraft. Together, Midwest and Skyways offer service to 47 cities.

In other news, Midwest Airlines is the subject of an unwanted takeover bid by AirTran Airways and has hired Goldman, Sachs & Co. as financial advisor to provide strategic advice following the recent decision by the company's board to reject the AirTran offer. The company will work with its financial advisor to further develop the its strategy to grow its business and maximize shareholder value. (RAN, December 18, p.1)