Why Midwest Express’ Takeoff Is Being Delayed … Again

Midwest Express continues to face significant headwinds.

Midwest Express Airlines’ plan to relaunch passenger air service is being delayed again after experiencing turbulence with a partner carrier.

Midwest Express revealed Monday that it not only has ended its partnership with Elite Airways but is also suing the Maine-based airline for allegedly breaching an agreement that would have allowed Midwest to return to the air using Milwaukee Mitchell International Airport as a base after being grounded for nearly a decade.

Elite Airways entered into an agreement to launch flying operations for Midwest Express, while Midwest pursued its own airline operating certificate and aircraft, both time-consuming and costly endeavors.

In the lawsuit filed in Milwaukee County Circuit Court on Monday, Midwest Express contends that it is owed $150,000 by Elite for breaching the contract.

Although Midwest Express had ended its partnership with Elite Airways, it plans to move forward with a goal of providing non-stop flights and bringing the once highly popular local air carrier back to life.

“We are in substantial discussions with other airline operators to bring back non-stop service to Milwaukee,” Midwest Express President Greg Aretakis says in a press release. “We have received a tremendous amount of support from the business community and former passengers who tell us that they need better options for air travel in Milwaukee, and we intend to deliver it.”

Midwest Express, which also announced it will continue with fundraising efforts, hasn’t set a new target date for the start of service.

The airline initially had announced that it had hoped to begin flying before the end of 2019. Aretakis then announced in late December that the airline’s return to the skies would be delayed until the end of the first quarter of 2020.

He said at the time that Midwest had planned to have its commercial infrastructure completed by year-end, but due to the pending holiday season and advanced planning needs of customers, the airline had decided to delay an announcement of schedules, pricing and initial flights until near the end of first quarter 2020.

Aretakis made no mention at that time of any issue with Elite. However, the lawsuit states that Midwest terminated the agreement on Dec. 31, 2019.

Midwest Express spokeswoman Laurie Coleman said in an email that no interviews would be granted, or further comment made at this time since this is an “ongoing legal issue.”

An Elite Airways spokeswoman didn’t respond to a request for comment.

Midwest and Elite entered into an airline services agreement on July 31, 2019, with Midwest making an unspecified monetary deposit with Elite, according to the lawsuit.

At a highly publicized event at Mitchell Airport in August, Midwest unveiled an Elite Airways aircraft, featuring Midwest Express branding and color scheme.

Aretakis called it a “monumental day in our efforts to return Midwest

Express to the air as Milwaukee’s hometown brand,” with many local dignitaries and throngs of media on hand for the festivities.

Earlier that month, Midwest Express had announced its partnership with Elite Airways.

John Pearsall, president of Elite Airways, said at the time that Elite was “proud to play a role in helping bring Midwest Express Airlines back to Wisconsin.”

Pearsall claimed Elite’s aircraft and top-notch crew would provide the experience and service that Midwest Express passengers had come to expect.

Midwest contends in the lawsuit that if either side terminated the agreement that Elite would be required to immediately repay Midwest the entire amount of the cash deposit. Midwest contends that it has only received a portion of the deposit from Elite and has made repeated requests for repayment of the balance.

“Elite has met each demand with a promise to return the deposit as soon as possible but has failed to follow through as promised each and every time,” Midwest Express states in the lawsuit.

Midwest plans to offer nonstop flights from Mitchell to three initial destinations: Cincinnati; Omaha, Nebraska; and Grand Rapids, Michigan. Midwest has identified all three cities as common destinations for Milwaukee area business travelers.

Midwest Express’ focus is expected to be on providing service on underserved business routes.

A private offering was filed with the U.S. Securities and Exchange Commission in May 2018, allowing Midwest Express to secure investors and begin implementing its plans to relaunch the airline in Milwaukee. Midwest stepped up fundraising, with a goal of $6 million to $8 million from local investors before the end of summer 2019.

Last April, Midwest Express signed a lease for space at MKE Regional Business Park near the airport for its corporate headquarters.

The reformed airline is being led by Aretakis, who previously served as vice president of planning and revenue management for Midwest, working under CEO Tim Hoeksema, a pilot who led the transformation of Midwest Express into a commercial airline in 1984.

Midwest built its reputation on unique offerings for its customers, including cushy seats arranged two-by-two on each side of the aisle, gourmet meals served on fancy dishes, wine, champagne and, perhaps most memorably, the chocolate chip cookies, which the airline plans to bring back if it starts flying again.

Airline observers have outlined the many challenges Midwest Express faces in trying to bring the airline back to life, including an intensely competitive industry that is labor intensive and generates relatively low margins, as well as the need for significant financial investment.

In addition to the remaining $150,000 deposit, Midwest Express is seeking repayment of certain costs associated with the lawsuit, including attorney fees.

Elite has 20 days to respond the allegations in the suit.

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Rich Rovito is a freelance writer for Milwaukee Magazine.