US AIRWAYS TO ADD MIDWAY AIRLINES AS REGIONAL JET AFFILIATE

17 July 2002

US Airways has signed a letter of intent to enter into a service agreement with Midway Airlines under which the Raleigh, N.C.-based carrier will operate as US Airways Express, flying an all-regional jet fleet beginning in October 2002. 

As part of the arrangement, US Airways will provide stand-by transportation to passengers currently holding Midway tickets during the suspension of Midway's operations and transition. 

US Airways also will implement a program to allow Midway Airlines' frequent fliers to convert their credits to Dividend Miles for future use on US Airways and partner carriers upon completion of the agreement. 

Under the eight-year service agreement, Midway will begin operating as US Airways Express in October 2002, initially operating a fleet of five 50-seat Bombardier CRJ regional jets, with that fleet growing to up to 18 CRJs by April 2003. The agreement is contingent on several factors, including Midway's successfully securing $5 million in additional capital, acquiring additional aircraft and reaching agreements with its units of the Air Line Pilots Association (ALPA) and the Association of Flight Attendants (AFA) for related labor concessions and reaching an agreement with US Airways on the issuance of warrants to purchase a substantial minority interest over the course of the agreement. 

The letter of intent also requires that 50 percent of the pilot positions at the carrier be reserved for furloughed US Airways pilots. 

"Midway will resume flying from Raleigh-Durham to Boston, New York LaGuardia and Washington Reagan airports as US Airways Express beginning in October, subject to government approvals, and as they take more regional jet deliveries, Midway will expand its route network to strategically support US Airways service to key East Coast markets," said Bruce Ashby, US Airways' senior vice president of corporate development. "By guaranteeing jobs to furloughed US Airways pilots, this agreement also helps in our commitment to provide opportunities for pilots until they can be recalled to mainline operations."

Once the agreement is implemented, passengers flying on Midway's US Airways Express flights will be able to earn and redeem miles in the Dividend Miles program. Operating as a US Airways Express carrier also will enable passengers to purchase tickets via US Airways' telephone reservations system, or on the airline's Web site at usairways.com. 

US Airways' frequent service to and from its largest hub in Charlotte, N.C., is a convenient alternative for passengers currently ticketed to, from or connecting through Midway's hub in Raleigh-Durham. Additionally, US Airways service through its Pittsburgh and Philadelphia hubs, as well as nonstop services to Boston, New York LaGuardia and Washington Reagan should provide ample capacity to handle the passengers ticketed to the eight destinations previously served by Midway.

Midway Airlines ticketed customers must first visit a Midway Airlines airport ticket counter no later than July 25, 2002, to have electronically issued tickets authorized for use on US Airways. If the ticket was issued through a travel agency, the customer may contact the agency for assistance. Midway Airlines will continue to staff its reservations centers and ticket counters. Further details are available via the Internet at midwayair.com, or by calling Midway at 1-800-446-4392. Customers who need to rebook on US Airways should call a dedicated reservation line at 1-800-510-0098.

If US Airways has a comparable fare available from the customer's originating city, or within 200 miles of the originating city, US Airways will confirm the reservation. If US Airways does not have available space on the desired flight, then the Midway customer would have to fly standby or request a refund directly from Midway.