A Southwest plane parked outside a hangar at Midway.
Operation Midway: Preserving Chicago’s Second Airport
In late November 1990, a Team of Southwest Airlines representatives booked a flight to Chicago, hoping for a Thanksgiving miracle. For months, Southwest had been dogged in its attempts to bolster its presence at Chicago’s Midway International Airport (MDW), where it was offering 43 flights per day from just a few jam-packed gates.
Midway checked all the necessary boxes. It wasn’t dominated by major carriers. It offered easy access to Chicago’s downtown for business travelers. And it provided Southwest access to millions of local leisure flyers.
Acquiring additional gates at MDW, however, was proving difficult because the airport’s gates were occupied by hometown carrier Midway Airlines.
When the Southwest contingent landed in the Windy City, local aviation officials cut to the chase with typical Chicago candor. “As long as Midway Airlines is in existence,” the Commissioner of the Chicago Department of Aviation declared, “[Southwest will] not get any more flights.”
Southwest negotiator and then-Vice President of Government Affairs Ron Ricks thanked the officials for their frankness but closed the meeting with one addendum: “We will abide by [your decision],” Ricks said, “but I’m just going to tell you that this is a horse race, and you just bet on the wrong horse. When Midway Airlines fails, and you’ve got 20 unused gates, you just give us a call and we’ll help you out.”
Four months later, in March 1991, Midwest Airlines filed for bankruptcy protection. The airline’s decline was due to a host of factors, including its decision in 1989 to purchase the Philadelphia operations of Eastern Airlines.
Southwest Chairman and CEO Herb Kelleher hoped to attain gate leases in exchange for payments or a loan that would keep Midway Airlines afloat. Unfortunately, Northwest Airlines, the nation’s fourth-largest airline at the time, offered Midway Airlines an offer that sounded—from the Southwest perspective—too good to be true.
Northwest pledged to buy not just Midway Airlines’ gates but the entire airline and rehire all its employees. When Herb was asked by a bankruptcy judge, under oath, if Southwest could guarantee the same, he said in all honesty he could not, as such a promise defied business logic. He could, however, guarantee Midway Airlines employees preferential hiring treatment—via a fair interviewing process that vetted them against Southwest standards and qualifications—but anything more would be disingenuous.
The coming weeks, however, produced a surprising twist. On November 13, 1991, Northwest did an about face and announced it was abandoning its plans to acquire Midway Airlines.
This news was not met kindly by the mayor of Chicago at the time, who’d made it a priority to improve and expand Midway. He told his aides to get Herb Kelleher on the phone immediately.
Once Herb was on the line, the mayor didn’t mince words: “You want gates?”
“Yes,” Herb replied.
“How many do you want?” countered the mayor.
“All of them,” said Herb—at which point the mayor said he expected to see him in Chicago as soon as possible and hung up.
A Southwest plane parked outside a hangar at Midway.
One major issue remained: The Midway gates had been sold to Northwest. Fortunately, Jim Parker, then-Southwest General Counsel, discovered an escape clause. According to the agreement, the city had the power to allow another airline to occupy Midway’s gates if they were not being used by their primary tenant. If Midway Airlines went bankrupt overnight, which seemed a surety given they’d barely been able to finish out the previous day, Southwest had a potential in.
Herb and the Southwest delegation arrived in Chicago at 1 a.m. on November 14, almost a year to the day from its previous visit. They were followed shortly thereafter by a Team of Employees who had already shipped the equipment they would need to a warehouse near the airport. The battle plans for ”Operation Midway” were drawn up and ready to be executed.
That same morning at 9 a.m., Herb and his legal Team met with the mayor’s aides and sweetened the pot. Southwest pledged $20 million in funds for the development and promotion of the airport, plus a commitment to explore expansion plans at Midway.
At the subsequent press conference announcing the partnership between Southwest and the city, a reporter asked when they could expect to see some signs of Southwest expansion at Midway. A Southwest spokesman quickly leaned into the microphone and announced it had already begun: Anyone who headed over to the airport right now could see the initial work.
Southwest was more than good on its word. On November 15, the Company held a job fair, sitting down with all 3,000 Midway Airlines employees seeking interviews for open or future positions. Some of these Employees hired in 1991 are still with the Company to this day.
Meanwhile, a deal was brokered with Northwest, which relinquished its claim to the gates. The city then leased the gates back to Southwest. In the years that followed, Southwest bolstered its presence at Midway, thanks in part to a number of strategic acquisitions, including various assets of ATA Airlines in 2004, as well as AirTran in 2010.
As of summer 2020, Southwest was offering 245 daily departures from 32 gates at Chicago Midway and estimates its economic impact on the city to be $8 billion annually—numbers that show Operation Midway has benefited both travelers and the city alike.