CEO Will Also Take 40 Percent Hit

Call it the cost of doing business. Midwest Air Group, parent company of Midwest Airlines, announced this week it will cut pay for most of its workers, including CEO Tim Hoeksema.

It was Hoeksema's job to break the news, according to The Associated Press. In a memo to workers Wednesday, Hoeksema started off by announcing he would take a 40 percent cut to his annual paycheck, too, to help better position the small Milwaukee-based airline against larger rivals.

"Our best choice is to fix this disparity so our costs better match our revenues, (or) file for Chapter 11 and try to fix it there, or ignore it and fail as a business," he said.

The amount of pay cuts Midwest will seek from its pilots and flight attendants wasn't released, but Hoeksema did give some rough numbers. He said the airline's top pilots make 32 percent more on average than those flying similar equipment at other airlines. The cost of those pilots' benefits is 45 higher than average, he added.

Hoeksema said Midwest flight attendants earn about 23 percent more than average, compared with other carriers.

Jay Schnedorf, chairman of the Midwest Airlines branch of the Air Line Pilots Association, had little to say Wednesday about Hoeksema's announcement... mostly because he hasn't seen hard numbers yet.

ALPA members will vote on their pay cuts... but many other positions at Midwest aren't subject to union approval, including maintenance workers and other professional staffers. Those workers will see their pay cut by 10 and five percent, respectively.

Senior VPs will see their total pay fall by 25 percent, and VPs by 17 percent. Senior managers and directors will have their pay cut by 11 percent. All those cuts, including Hoeksema's, will go into effect July 15.

FMI: www.midwestairlines.com