Following the cancellation of all flights by the Federal Aviation Administration Tuesday and further drops in revenue, Midway Airlines suspended all future flight operations.
Midway, Raleigh-Durham International Airport's largest carrier, had filed for bankruptcy and cut back on flight schedules one month ago, citing several factors including a downturn in business travel. Wednesday, the troubled airline shut down its operations completely, immediately laying off about 1,700 employees.
"The company in its current entity will not operate again," Midway spokesperson Karen Wing said.
She said the recent terrorist attacks, and the subsequent closing of all airports nationwide, were a "very direct factor" in the airline's decision to suspend operations. "We anticipated there would be a strong decline in demand for air travel going forward," Wing said. "There were a lot of people requesting refunds, because they were nervous about flying."
Teresa Damiano, an RDU spokesperson, agreed that the aviation industry would probably take time to recover from the attacks. "I think you will most likely see a decline in interest for a while, obviously, until things calm down and stabilize," she said.
After declaring bankruptcy last month, Midway had cut 700 jobs, grounded 17 aircraft and suspended service to nine cities in an effort to cut back on its costs and repay its debts, securing a $15 million loan that allowed it to continue its remaining operations. Wing said the effort appeared to be working until Tuesday.
"Things were going pretty well," she said. "We fully expected to return to normalcy."
But she said the FAA's ban on all air traffic, which followed the attacks and continued through Wednesday, had taken away the airline's revenue stream while its costs continued to pile up.
Damiano said it was unclear how the Midway shutdown would affect the airport in the near future, especially given the confusion surrounding Tuesday's attacks.
The FAA has ordered all airports to remain closed until they can implement a list of stringent security measures. RDU must also deal with the logistical difficulties caused by having about 80 planes parked "wing tip to wing tip" on the ground, 25 of which were diverted from other destinations Tuesday, said Mirinda Kossoff, another airport spokesperson.
But Damiano said that in the long run, the airport should be able to recuperate from the loss of Midway.
"When things get back to normal, we would expect the law of supply and demand to be put back into effect," she said. "The expectation is that other carriers... would be able to fill the void of routes that Midway had left open."
Damiano did not cite any specific airlines that might replace the routes dropped by Midway, however.
Wing, the Midway spokesperson, said the 1,700 employees who were laid off will receive wages through the end of next week. The 700 jobs cut last month leave the airline with only about 5 percent of its employees remaining.
"There are about 100 of us remaining that are really just here to wrap up operations," Wing said.
Midway will either refund the money of customers who hold reservations for the future or provide them tickets on another carrier.
Meg Lawson contributed to this story.
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