It was incorporated on October 13, 1976, by Kenneth T. Carlson, Irving T. Tague and William B. Owens, filing with the Civil Aeronautics Board (CAB) for an airline operating certificate.

Although it received its operating certificate from the CAB prior to the passage of the Airline Deregulation Act in 1978, it was viewed as the first post-deregulation start-up.

Unfortunately, the carrier perished soon after attempting to grow substantially by purchasing the Philadelphia hub of bankrupt Eastern Air Lines.

A deal was struck to sell the company, still operating in bankruptcy, to Northwest Airlines, which backed out at the last minute, leaving Midway dead in November 1991.

Founder Kenneth Carlson was in fact an SH&E vice president immediately prior to starting Midway Airlines.

[10] Even with the way relatively clear, Midway Airlines found it hard to raise money, Chicago investors were generally uninterested.

One was Federal Express, having obtained Boeing 737-200QC aircraft with which it wanted to fly packages at night and passengers during the day.

Some founders (like Carlson)[6] were gone by 1980 and in early 1982, Irving Tague took a leave of absence for “personal reasons,” with David Hinson becoming acting chair.

Chicago was particularly badly affected by the extended disruption caused by the August 1981 air traffic controllers strike.

United Airlines grounded 50 aircraft, and Midway found itself unable to fully employ eight DC-9-30s it acquired from Ansett Australia.

In a long-planned move, directors fired Linkon in July 1982,[46] shortly after Midway achieved a profitable second quarter, one in which most of the industry made a loss.

[50][51] Bass and Meehan instituted “Metrolink” branded all-business class service, with four-abreast seating, a “business center” at Midway airport, jetways and other amenities.

Meanwhile, in 1984, reacting to a proposal from Air Florida executives, Midway acquired, in stages, the remains of that bankrupt carrier.

There were two attractions (1) winter demand to offset the seasonality of the Metrolink system and (2) Air Florida’s slots at airports like LaGuardia and Washington National.

1984 results also included a $1.5mm writeoff for an expensive abortive attempt to establish a helicopter service between Midway, O’Hare and Meigs Field, to be called Chicago Airlink.

[58] In January 1985, Bass resigned, followed by Meehan in February, with David Hinson, a Midway founder and founding board member, taking over.

[62] In May, Hinson warded off an attempted proxy fight by other (departed) founders, including Carlson, wanting to return the airline to its original business model.

[73] As part of Eastern's attempts to raise cash, in June, Midway bought the Philadelphia gates (and other assets, such as routes to Toronto and Montreal from Philly) as well as 16 DC-9 aircraft for $210mm from the bankrupt carrier.

[74][75][76] Further investment included hiring, refurbishing the aircraft and the former Eastern space in Philly, and heavy marketing to introduce east coast residents to Midway.

Iraq invaded Kuwait on August 2, pitching the US into the Gulf War, inducing an oil price shock and an immediate decline in air travel.

In October the bankruptcy court approved a $175mm takeover offer by Northwest Airlines, including assuming remaining aircraft and employees.

About the airline business he said, “if you are careful and prudent, you can survive and do relatively well.”[71] As the Philadelphia strategy turned sour, David Hinson repeatedly defended Midway as being the victim of circumstance.

[85][83][96] The circumstances facing the US airline business in the early 1990s were indeed poor, as reflected in deep industry losses during this period.

[97] But the 1989 decision to bulk up Midway and attack the much larger USAir was the exact opposite of what Hinson advocated only two years earlier and the carrier's end was a direct result of that.

After Midway Airlines, David Hinson went on to work for McDonnell Douglas and served as the head of the Federal Aviation Administration under President Bill Clinton.

[98] Gordon Linkon, the president who achieved Midway's highest annual operating margin in 1981, went on to found Florida Express.

[99] Canada Caribbean United States In 1987 Midway Airlines purchased commuter air carrier Fischer Brothers Aviation based in Galion, Ohio, and moved the entire operation to Springfield, Illinois.

The initial move consisted of the Fischer Brothers management team (including Vice President of Operations Armando Cardenas, Chief Pilot Mark Zweidinger, Vice President of Customer Service Mark Fisher, Director of Maintenance Craig Anderson and Personnel Manager Cynthia Baldwin) and was led by Midway Airlines executive Richard Pfennig.

Gordon Jones, Vice President of Maintenance and Jerry Turpstra, Chief Inspector joined the management group in June 1987.

The second involved a goose striking one of the landing gear sponsons causing substantial damage to the fairing and structure.