Midwest Air Group Reports Fourth Quarter and 2006 Results

Airline Reports Third Consecutive Quarterly Profit and Profitable Year

Summary: Fourth Quarter and Full-Year 2006 vs. Fourth Quarter and Full-Year

2005

- Operating revenue: Q4: increased 17.9% to $168.3 million; 2006: increased

27.1% to $664.5 million

- Net income: Q4: income of $3.6 million vs. loss of $13.8 million; 2006:

income of $5.4 million vs. loss of $64.9 million

- Diluted earnings per share: Q4: earnings of $0.16 vs. loss of $0.79;

2006: earnings of $0.29 vs. loss of $3.71

- Scheduled service revenue passenger miles: Q4: increased 16.3% to 1.0

billion on a 6.2% increase in capacity; 2006: increased 21.5% to 4.1

billion on a 13.1% increase in capacity

- Revenue per available seat mile: Q4: increased 11.7% to 12.27 cents;

2006: increased 12.5% to 12.26 cents

- Fuel prices: Q4: lower fuel prices positively impacted operating results

by $0.9 million, or $0.04 per share - diluted; 2006: higher fuel prices

negatively impacted operating results by $33.0 million, or $1.37 per share

- diluted for the year



25 Jan, 2007, 00:00 ET from Midwest Air Group, Inc.

    MILWAUKEE, Jan. 25 /PRNewswire-FirstCall/ -- Midwest Air Group, Inc.
 (Amex:   MEH) today reported fourth quarter and full-year results for its
 Midwest Airlines and Skyway Airlines (dba Midwest Connect) operations.
     "Our performance was very strong, resulting in our third consecutive
 quarterly profit and continuing the turnaround for Midwest Air Group," said
 Timothy E. Hoeksema, chairman and chief executive officer. "Traffic and
 revenue remained strong, and we benefited from moderating fuel prices in
 the quarter. Clearly, our strategic plan is driving growth for the
 company."
     Comparing fourth quarter 2006 to fourth quarter 2005, operating revenue
 increased 17.9% to $168.3 million. Operating income improved to $1.9
 million from a $14.0 million loss in the fourth quarter of 2005, while net
 income improved to $3.6 million from a $13.8 million loss. Due to
 accumulated losses, Midwest Air Group discontinued recording federal income
 tax benefit on losses in second quarter 2004 and state income tax benefit
 on losses in second quarter 2005. During 2006, the company recorded
 alternative minimum tax expense, offset by the favorable resolution of tax
 contingencies previously accrued. Diluted earnings per share were $0.16,
 compared with a $0.79 loss in the same quarter a year earlier.
     The revenue increase reflects a 16.3% increase in passenger traffic,
 due to strong customer demand in response to competitive pricing, as well
 as schedule and service enhancements. A 0.9% increase in revenue yield was
 driven by improvements in the company's revenue management processes and a
 reduction in industry capacity. Total operating expenses increased 6.2%,
 due primarily to the 6.2% increase in capacity and increased flight
 operations, which led to increases in fuel expense; salary, wages and
 benefits; aircraft rentals; and commissions. Fuel expense increased $2.9
 million, or 5.3% - including $0.9 million of favorable price impact
 (calculated by applying 2005 prices to actual gallons consumed in 2006 and
 comparing the result to actual 2006 expense). Fuel expense includes the
 effect of hedging, which negatively affected fuel cost by $2.7 million in
 the quarter.
     For the full year, operating revenue increased 27.1% to $664.5 million.
 Operating income improved to $0.6 million from a $65.2 million loss in
 2005, while net income improved to $5.4 million from a $64.9 million loss
 the previous year. Diluted earnings per share rose to $0.29 from a $3.71
 loss. Results for 2005 included an impairment charge due to the planned
 retirement of two aircraft, as well as capitalized expense write-offs, a
 litigation settlement, severance costs and a change in employee vacation
 policy totaling $0.98 per share.
     The company ended the year with $157.7 million in cash, of which $118.1
 million was unrestricted. Total cash was up from $137.8 million at December
 31, 2005; unrestricted cash was up from $99.0 million at the same date.
 Capital spending - net of credits used to fund such spending - resulted in
 a cash outlay of $13.5 million for the year and consisted primarily of the
 acquisition of two Fairchild 328JETs, a spare Boeing 717 engine and
 additional spare parts for the Boeing 717 fleet.
     Midwest continues to post sizeable gains in market share in its
 Milwaukee and Kansas City hubs. In November 2006, the most recent month for
 which market share results are available:
     -- Midwest Airlines and Midwest Connect carried 52.2% of all passengers
        departing from Milwaukee, up from 50.4% in the same month a year
        earlier. In November 2006, the airlines transported 148,691 Milwaukee
        passengers, up 2.3% from 145,376 passengers in November 2005.
     -- In Kansas City, Midwest Airlines market share rose to 10.8% for
        November from 8.9% in the same month a year earlier. In November 2006,
        Midwest Airlines carried a total of 48,837 Kansas City passengers, up
        35.4% from 36,068 passengers in November 2005.
 
     Midwest Airlines
     At Midwest Airlines, passenger revenue per scheduled service available
 seat mile increased 13.1% in fourth quarter 2006 compared with the same
 quarter a year earlier. Load factor increased 6.7 percentage points due to
 a 17.5% increase in passenger traffic on a 7.0% increase in capacity.
 Revenue yield increased 2.9%.
     Into-plane fuel prices decreased 1.3% in fourth quarter 2006, averaging
 $2.09 per gallon versus $2.12 per gallon in fourth quarter 2005, and
 resulted in a $0.7 million favorable price impact. Fuel consumption
 increases resulted in a $4.0 million unfavorable impact in the quarter,
 primarily as a result of the increase in the number of flight operations.
     In the fourth quarter, cost per available seat mile (unit costs) at
 Midwest Airlines increased $0.0031 to $0.1121, or 2.9% (excluding fuel,
 increased $0.0029 to $0.0725, or 4.2%) compared with fourth quarter 2005.
     Note: Cost per available seat mile excluding fuel expense is an
 industry measurement that provides management and investors the ability to
 track changes in cost absent fuel-related expenses.
     Midwest Connect
     At Midwest Connect, passenger revenue per scheduled service available
 seat mile increased 5.1% in the fourth quarter. Passenger traffic increased
 0.6% on a 4.0% decrease in capacity, resulting in a 3.1 percentage point
 improvement in load factor, while revenue yield increased 0.3%. Cost per
 available seat mile decreased $0.0129 to $0.2931, or 4.2% (excluding fuel,
 decreased $0.0115 to $0.2225, or 4.9%) compared with fourth quarter 2005.
 Excluding fuel, the increase was due primarily to labor costs associated
 with ramp functions performed for Midwest Airlines; the transfer of ramp
 and dining services functions to Midwest Connect in mid-2005 has reduced
 the total cost of these services to Midwest Air Group. Into-plane fuel
 prices decreased 2.7% in fourth quarter 2006, averaging $2.13 per gallon
 versus $2.19 per gallon in fourth quarter 2005. Fuel consumption decreases
 resulted in a $0.2 million favorable impact quarter over quarter.
     Highlights and Outlook
 
     In the fourth quarter of 2006:
     -- Midwest Airlines selected SkyWest Airlines, Inc. to operate 50-seat
        regional jet service beginning in April 2007. SkyWest will operate a
        minimum of 15 and up to 25 Canadair regional jets for Midwest during
        the five-year term of the agreement. Flying as Midwest Connect, the
        SkyWest jets will allow Midwest to add new destinations, increase
        frequency on existing routes and upgrade regional routes to all-jet
        service. The new regional jet program is an essential component of
        Midwest's 2007 growth plans.
     -- Midwest Airlines signed a letter of intent to acquire two additional
        MD-80 series jet aircraft, expanding its fleet of MD-80s from 11 to 13.
        The airline plans to put the planes into revenue service by mid-2007.
     -- Skyway Airlines completed the purchase of a Fairchild 328JET regional
        jet, which will enter service in first quarter 2007.
     -- Midwest Air Group increased the number of directors on its board from
        eight to nine, and elected James R. Boris to the new position. He is
        chairman of JB Capital Management, LLC, a private investment firm.
     -- Midwest Airlines began offering complimentary canine travel packs to
        dogs checking in with their owners for travel on the airline. The pack
        is an enhancement to the airline's popular Premier Pet Program, the
        first program of its kind to offer frequent flying pets that travel
        with their owners the opportunity to earn free travel.
     -- Midwest Airlines re-launched Best Care News, its newsletter for
        frequent flyers, in a monthly all-electronic format - reaching more
        people, more frequently, in a more cost-effective manner.
     -- Midwest Airlines launched a blog that provides travel tips and tourist
        information on the cities served by the airline. Geared toward women
        traveling together or in groups, "Travels With Tish - Girlfriends
        Getaway Guide" can be accessed at
        http://girlfriendsgetaway.wordpress.com.
     -- Skyway Airlines was awarded the Diamond Award, the top honor in the
        Federal Aviation Administration's Aviation Maintenance Technician
        awards program. The award recognizes exemplary training of maintenance
        technicians.
     Additionally, Midwest enhanced schedules and upgraded equipment on a
 number of routes:
     -- Midwest Airlines enhanced its flight schedule in two key markets:
        Kansas City - New York La Guardia with a fifth daily nonstop and Kansas
        City - Milwaukee with an eighth daily nonstop. In addition to offering
        travelers a more flexible and convenient schedule on the routes, the
        new service also provides significantly more connection opportunities
        through Kansas City.
     -- Midwest Airlines enhanced service between Milwaukee and Florida, adding
        second daily seasonal nonstop roundtrips to Ft. Myers, Ft. Lauderdale
        and Tampa. The airline also launched new daily nonstop service between
        Kansas City and Ft. Myers and added seasonal nonstop daily frequency
        between Kansas City and both Ft. Lauderdale and Orlando.
     -- Midwest Connect upgraded service in its Milwaukee-Appleton, Milwaukee -
        Columbus, Milwaukee - Dayton markets to regional jets, as well as one
        additional Milwaukee - Grand Rapids daily roundtrip.
 
     In the first quarter of 2007:
     Midwest Airlines has announced a number of service expansions that are
 part of its 2007 strategic growth plan.
     -- On March 4, Midwest Connect plans to launch nonstop service between
        Milwaukee and Duluth/Superior. The new service will be aboard the
        airline's quick and comfortable Fairchild 328JET aircraft. On the same
        day, the airline will also upgrade its Milwaukee-St. Louis service to
        the regional jets.
     -- On April 1, Midwest Airlines plans to introduce service to
        Seattle/Tacoma, the 49th destination on Midwest's nationwide route
        network. The airline will offer nonstop Signature Service - featuring
        two-by-two wide leather seats and generous legroom on new Boeing 717
        aircraft - from Kansas City, with easy connections to and from
        Milwaukee.
     Going forward, Hoeksema said Midwest is committed to creating long-term
 value while continuing to provide the superior customer service that its
 customers expect. "Our long-term strategic plan provides significant
 opportunities to continue to improve profitability, including a 15%
 increase in capacity in 2007 and an average increase of 10% per year over
 the next three years. And our customers will benefit from aggressive route
 expansion and equipment upgrades in 2007, as well as the addition of at
 least six new destinations and as many as 12 new routes."
     For the full year of 2007, Midwest is projecting non-GAAP net earnings
 per diluted share to be in excess of $1.70. Midwest is also projecting that
 2007 revenues will exceed $825 million and 2007 EBITDAR will exceed $140
 million. GAAP (Generally Accepted Accounting Principles) net earnings per
 diluted share in 2007 will include expenses relating to the unsolicited
 exchange offer by AirTran and other items that are not currently
 determinable, but may be significant. For that reason, Midwest is unable to
 provide full-year GAAP net earnings at this time.
     EBITDAR (earnings before interest, taxes, depreciation, amortization
 and rent) is considered to be a non-GAAP financial measure.
     Midwest believes that these non-GAAP measures, when presented in
 conjunction with comparable GAAP measures, are useful because that
 information is an appropriate measure for evaluating Midwest's operating
 performance as these costs are not directly attributable to the underlying
 performance of its business operations. Internally, Midwest uses this
 non-GAAP information as an indicator of business performance and
 management's effectiveness. These measures should be considered in addition
 to, not a substitute for, or superior to, measures of financial performance
 prepared in accordance with GAAP.
     Midwest Air Group issued a separate news release today describing the
 position of its board of directors regarding AirTran's unsolicited exchange
 offer.
     Management of Midwest Air Group will discuss the company's financial
 results and its board's position on the exchange offer in a conference call
 with industry analysts and institutional investors at 11 a.m. Eastern time
 today. The discussion will be available simultaneously in a listen-only
 mode and for the following 30 days at
 http://phx.corporate-ir.net/phoenix.zhtml?c=88626&p=irol-irhome.
     Midwest Airlines features jet service throughout the United States,
 including Milwaukee's most daily nonstop flights and best schedule to major
 destinations. Catering primarily to business travelers and discerning
 leisure travelers, the airline earned its reputation as "The best care in
 the air" by providing passengers with impeccable service and onboard
 amenities at competitive fares. Skyway Airlines, Inc. - Midwest's wholly
 owned subsidiary - operates as Midwest Connect and offers connections to
 Midwest Airlines as well as point-to-point service between select markets
 on regional jet and turboprop aircraft. Together, the airlines offer
 service to 49 cities. More information is available at
 http://www.midwestairlines.com.
     This document contains forward-looking statements about the results
 expected under the company's strategic plan and that otherwise may state
 the company's or management's intentions, hopes, beliefs, expectations or
 predictions for the future. Words such as "projecting," "expect,"
 "anticipate," "believe," "estimate," "goal," "plan," "objective" or similar
 words are intended to identify forward-looking statements. It is important
 to note that the company's actual results could differ materially from the
 projected results contained in these forward-looking statements. Factors
 that may cause such a difference to occur include, but are not limited to,
 fees and expenses incurred in connection with AirTran's unsolicited
 exchange offer and the risk factors described in "Item 1A. Risk Factors" in
 the company's "Annual Report on Form 10-K" for the year ended December 31,
 2005.
                              MIDWEST AIR GROUP, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except per share amounts)
                                    (Unaudited)
 
                                              Three Months Ended
                                                 December 31,        % Change
                                                                       Better/
                                              2006         2005       (Worse)
 
     Operating revenues:
          Passenger service                 $147,033     $125,279      17.4%
          Cargo                                3,122        1,831      70.5%
          Other                               18,167       15,656      16.0%
            Total operating revenues         168,322      142,766      17.9%
 
     Operating expenses:
          Salaries, wages and benefits        40,541       37,240      (8.9%)
          Aircraft fuel and oil               57,121       54,229      (5.3%)
          Commissions                          4,559        3,694     (23.4%)
          Dining services                      1,973        2,186       9.8%
          Station rental, landing and
           other fees                         13,039       13,240       1.5%
          Aircraft maintenance, materials
           and repairs                        12,934       13,142       1.6%
          Depreciation and amortization        3,945        3,646      (8.2%)
          Aircraft rentals                    16,442       13,872     (18.5%)
          Impairment loss                          0            0        NM
          Other                               15,861       15,473      (2.5%)
            Total operating expenses         166,415      156,722      (6.2%)
     Operating income/(loss)                   1,907      (13,956)       NM
 
     Other (expense)/income:
          Interest income                      2,089        1,016     105.7%
          Interest expense                      (792)        (908)     12.8%
            Total other (expense)/income       1,297          108        NM
 
     Income/(loss) before income tax           3,204      (13,848)       NM
     Income tax (benefit)                       (403)           0        NM
 
     Net income/(loss)                        $3,607     $(13,848)       NM
 
     Income/(loss) per common share -
      basic:                                   $0.19       $(0.79)       NM
     Income/(loss) per common share -
      diluted:                                 $0.16       $(0.79)       NM
 
     Weighted average shares - basic      18,888,835   17,553,323
     Weighted average shares - diluted    25,154,682   17,553,323
 
     See notes to unaudited condensed consolidated financial statements.
 
 
                              MIDWEST AIR GROUP, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except per share amounts)
                                    (Unaudited)
 
                                               Twelve Months Ended
                                                   December 31,       % Change
                                                2006         2005      Better/
                                                                       (Worse)
 
     Operating revenues:
          Passenger service                   $588,242     $459,652     28.0%
          Cargo                                  9,444        6,323     49.4%
          Other                                 66,815       57,014     17.2%
            Total operating revenues           664,501      522,989     27.1%
 
     Operating expenses:
          Salaries, wages and benefits         160,060      147,010     (8.9%)
          Aircraft fuel and oil                232,013      178,079    (30.3%)
          Commissions                           18,018       13,784    (30.7%)
          Dining services                        8,397        9,622     12.7%
          Station rental, landing and
           other fees                           51,562       46,282    (11.4%)
          Aircraft maintenance, materials
           and repairs                          51,451       51,823      0.7%
          Depreciation and amortization         15,178       16,001      5.1%
          Aircraft rentals                      64,215       51,468    (24.8%)
          Impairment loss                            0       15,622       NM
          Other                                 63,015       58,466     (7.8%)
            Total operating expenses           663,909      588,157    (12.9%)
     Operating income/(loss)                       592      (65,168)   100.9%
 
     Other (expense)/income:
          Interest income                        7,701        3,723    106.8%
          Interest expense                      (3,284)      (3,581)     8.3%
            Total other (expense)/income         4,417          142       NM
 
     Income/(loss) before income tax             5,009      (65,026)      NM
     Income tax (benefit)                         (403)        (140)   187.9%
 
     Net income/(loss)                          $5,412     $(64,886)      NM
 
 
     Income/(loss) per common share -
      basic:                                     $0.30       $(3.71)      NM
     Income/(loss) per common share -
      diluted:                                   $0.29       $(3.71)      NM
 
     Weighted average shares - basic        18,117,907   17,508,360
     Weighted average shares - diluted      24,033,540   17,508,360
 
     See notes to unaudited condensed consolidated financial statements.
 
 
                              MIDWEST AIR GROUP, INC.
                                OPERATING STATISTICS
 
                                                 Three Months Ended
                                                    December 31,
                                              2006               2005
     Midwest Air Group
     Scheduled Service Revenue
      Passenger Miles (000s)                1,004,520           863,436
     Scheduled Service Available
      Seat Miles (000s)                     1,360,608         1,281,191
     Total Available Seat Miles (000s)      1,371,308         1,299,289
     Load Factor (%)                             73.8%             67.4%
     Revenue Yield                            $0.1464           $0.1451
     Passenger Revenue per Schd. Svc. ASM     $0.1081           $0.0978
     Total Revenue per Total ASM              $0.1227           $0.1099
     Total Cost per Total ASM                 $0.1214           $0.1206
     Total Cost per Total ASM
      (ex-fuel cost) (1)                      $0.0797           $0.0789
     Number of Flights                         27,126            27,163
     Into-plane Fuel Cost per Gallon            $2.10             $2.13
     Full-time Equivalent Employees
      at End of Period                          3,020             2,906
     Aircraft in Service at End of Period          55                55
 
     Midwest Airlines Operations
     Origin & Destination
      Passengers                              893,265           778,121
     Scheduled Service Revenue
      Passenger Miles (000s)                  942,840           802,119
     Scheduled Service Available
      Seat Miles (000s)                     1,268,643         1,185,368
     Total Available Seat Miles (000s)      1,279,342         1,203,466
     Load Factor (%)                             74.3%             67.7%
     Revenue Yield                            $0.1316           $0.1279
     Passenger Revenue per Schd. Svc. ASM     $0.0978           $0.0865
     Total Revenue per Total ASM              $0.1144           $0.1005
     Total Cost per Total ASM                 $0.1121           $0.1089
     Total Cost per Total ASM (ex-
      fuel cost) (1)                          $0.0725           $0.0696
     Average Passenger Trip Length (miles)      1,055             1,031
     Number of Flights                         13,877            12,653
     Into-plane Fuel Cost per Gallon            $2.09             $2.12
     Full-time Equivalent Employees
      at End of Period                          2,101             1,905
     Aircraft in Service at End of Period          36                34
 
     Midwest Connect Operations
     Origin & Destination Passengers          194,613           200,273
     Scheduled Service Revenue
      Passenger Miles (000s)                   61,681            61,317
     Scheduled Service Available
      Seat Miles (000s)                        91,965            95,823
     Total Available Seat Miles (000s)         91,965            95,823
     Load Factor (%)                             67.1%             64.0%
     Revenue Yield                            $0.3717           $0.3705
     Passenger Revenue per Schd. Svc. ASM     $0.2493           $0.2371
     Total Revenue per Total ASM              $0.2818           $0.2662
     Total Cost per Total ASM                 $0.2931           $0.3060
     Total Cost per Total ASM
      (ex-fuel cost) (1)                      $0.2225           $0.2339
     Average Passenger Trip Length (miles)        317               306
     Number of Flights                         13,249            14,510
     Into-plane Fuel Cost per Gallon            $2.13             $2.19
     Full-time Equivalent Employees
      at End of Period                            919             1,001
     Aircraft in Service at End of Period          19                21
 
 
                                                 Twelve Months Ended
                                                     December 31,
                                              2006                2005
     Midwest Air Group
     Scheduled Service Revenue
      Passenger Miles (000s)               4,086,394           3,363,995
     Scheduled Service Available
      Seat Miles (000s)                    5,362,671           4,740,662
     Total Available Seat Miles (000s)     5,421,119           4,799,932
     Load Factor (%)                            76.2%               71.0%
     Revenue Yield                           $0.1440             $0.1366
     Passenger Revenue per Schd.
      Svc. ASM                               $0.1097             $0.0970
     Total Revenue per Total ASM             $0.1226             $0.1090
     Total Cost per Total ASM                $0.1225             $0.1225
     Total Cost per Total ASM
      (ex-fuel cost) (1)                     $0.0797             $0.0854
     Number of Flights                       110,120             106,042
     Into-plane Fuel Cost per
      Gallon                                   $2.17               $1.86
     Full-time Equivalent Employees
      at End of Period                         3,020               2,906
     Aircraft in Service at End of Period         55                  55
 
     Midwest Airlines Operations
     Origin & Destination Passengers       3,621,048           3,009,082
     Scheduled Service Revenue
      Passenger Miles (000s)               3,827,111           3,121,785
     Scheduled Service Available
      Seat Miles (000s)                    4,982,631           4,358,678
     Total Available Seat Miles (000s)     5,040,712           4,417,682
     Load Factor (%)                            76.8%               71.6%
     Revenue Yield                           $0.1285             $0.1193
     Passenger Revenue per Schd. Svc. ASM    $0.0987             $0.0854
     Total Revenue per Total ASM             $0.1135             $0.0994
     Total Cost per Total ASM                $0.1127             $0.1121
     Total Cost per Total ASM
     (ex-fuel cost) (1)                      $0.0722             $0.0773
     Average Passenger Trip Length (miles)     1,057               1,038
     Number of Flights                        54,213              46,492
     Into-plane Fuel Cost per Gallon           $2.16               $1.85
     Full-time Equivalent Employees
      at End of Period                         2,101               1,905
     Aircraft in Service at End of Period         36                  34
 
     Midwest Connect Operations
     Origin & Destination Passengers         819,946             820,487
     Scheduled Service Revenue
      Passenger Miles (000s)                 259,283             242,210
     Scheduled Service Available
      Seat Miles (000s)                      380,040             381,983
     Total Available Seat Miles (000s)       380,407             382,251
     Load Factor (%)                            68.2%               63.4%
     Revenue Yield                           $0.3719             $0.3606
     Passenger Revenue per Schd. Svc. ASM    $0.2537             $0.2286
     Total Revenue per Total ASM             $0.2851             $0.2471
     Total Cost per Total ASM                $0.2936             $0.2698
     Total Cost per Total ASM
      (ex-fuel cost) (1)                     $0.2210             $0.2065
     Average Passenger Trip Length (miles)       316                 295
     Number of Flights                        55,907              59,550
     Into-plane Fuel Cost per Gallon           $2.21               $1.91
     Full-time Equivalent Employees
      at End of Period                           919               1,001
     Aircraft in Service at End of Period         19                  21
 
     (1) Non-GAAP measurement.
     Note: All statistics exclude charter operations except the following:
 Total Available Seat Miles ("ASMs"), Total Cost per Total ASM, Total Cost
 per ASM (ex-fuel cost), Into-plane Fuel Cost, Number of Employees and
 Aircraft in Service. Aircraft acquired but not yet placed into service are
 excluded from the aircraft in service statistics.
     Numbers in this table may not be recalculated due to rounding.
 
 
                              MIDWEST AIR GROUP, INC.
                            NON-GAAP FINANCIAL MEASURES
 
                                               Three Months Ended
                                                   December 31,
                                                2006         2005         %
     Midwest Air Group
     Total GAAP operating expenses ($000)     $166,415     $156,722     6.2%
     ASMs (000)                              1,371,308    1,299,289     5.5%
     CASM                                      $0.1214      $0.1206     0.6%
 
     Total GAAP operating expenses ($000)     $166,415     $156,722     6.2%
     Less: aircraft fuel ($000)                $57,121      $54,229     5.3%
 
     Operating expenses excluding fuel ($000) $109,294     $102,493     6.6%
     ASMs (000)                              1,371,308    1,299,289     5.5%
     CASM excluding fuel                       $0.0797      $0.0789     1.0%
 
 
     Midwest Airlines Operations
     Total GAAP operating expenses ($000)     $143,396     $131,111     9.4%
     ASMs (000)                              1,279,342    1,203,466     6.3%
     CASM                                      $0.1121      $0.1089     2.9%
 
     Total GAAP operating expenses ($000)     $143,396     $131,111     9.4%
     Less: aircraft fuel ($000)                $50,625      $47,320     7.0%
 
     Operating expenses excluding fuel ($000)  $92,772      $83,792    10.7%
     ASMs (000)                              1,279,342    1,203,466     6.3%
     CASM excluding fuel                       $0.0725      $0.0696     4.2%
 
 
     Midwest Connect Operations
     Total GAAP operating expenses ($000)      $26,957      $29,325    (8.1%)
     ASMs (000)                                 91,965       95,823    (4.0%)
     CASM                                      $0.2931      $0.3060    (4.2%)
 
     Total GAAP operating expenses ($000)      $26,957      $29,325    (8.1%)
     Less: aircraft fuel ($000)                 $6,497       $6,909    (6.0%)
 
     Operating expenses excluding fuel ($000)  $20,460      $22,417    (8.7%)
     ASMs (000)                                 91,965       95,823    (4.0%)
     CASM excluding fuel                       $0.2225      $0.2339    (4.9%)
 
 
                                              Twelve Months Ended
                                                  December 31,
                                              2006           2005         %
     Midwest Air Group
     Total GAAP operating expenses ($000)     $663,909     $588,157    12.9%
     ASMs (000)                              5,421,119    4,799,932    12.9%
     CASM                                      $0.1225      $0.1225    (0.1%)
 
     Total GAAP operating expenses ($000)     $663,909     $588,157    12.9%
     Less: aircraft fuel ($000)               $232,013     $178,079    30.3%
 
     Operating expenses excluding fuel
      ($000)                                  $431,897     $410,078     5.3%
     ASMs (000)                              5,421,119    4,799,932    12.9%
     CASM excluding fuel                       $0.0797      $0.0854    (6.7%)
 
     Midwest Airlines Operations
     Total GAAP operating expenses ($000)     $568,259     $495,418    14.7%
     ASMs (000)                              5,040,712    4,417,682    14.1%
     CASM                                      $0.1127      $0.1121     0.5%
 
     Total GAAP operating expenses ($000)     $568,259     $495,418    14.7%
     Less: aircraft fuel ($000)               $204,399     $153,859    32.8%
 
     Operating expenses excluding fuel
      ($000)                                  $363,860     $341,559     6.5%
     ASMs (000)                              5,040,712    4,417,682    14.1%
     CASM excluding fuel                       $0.0722      $0.0773    (6.6%)
 
     Midwest Connect Operations
     Total GAAP operating expenses ($000)     $111,677     $103,141     8.3%
     ASMs (000)                                380,407      382,251    (0.5%)
     CASM                                      $0.2936      $0.2698     8.8%
 
     Total GAAP operating expenses ($000)     $111,677     $103,141     8.3%
     Less: aircraft fuel ($000)                $27,614      $24,220    14.0%
 
     Operating expenses excluding fuel
      ($000)                                   $84,063      $78,921     6.5%
     ASMs (000)                                380,407      382,251    (0.5%)
     CASM excluding fuel                       $0.2210      $0.2065     7.0%
 
     Note:  Numbers and totals in this table may not be recalculated due to
     rounding and intercompany eliminations.
 
 

SOURCE Midwest Air Group, Inc.
    MILWAUKEE, Jan. 25 /PRNewswire-FirstCall/ -- Midwest Air Group, Inc.
 (Amex:   MEH) today reported fourth quarter and full-year results for its
 Midwest Airlines and Skyway Airlines (dba Midwest Connect) operations.
     "Our performance was very strong, resulting in our third consecutive
 quarterly profit and continuing the turnaround for Midwest Air Group," said
 Timothy E. Hoeksema, chairman and chief executive officer. "Traffic and
 revenue remained strong, and we benefited from moderating fuel prices in
 the quarter. Clearly, our strategic plan is driving growth for the
 company."
     Comparing fourth quarter 2006 to fourth quarter 2005, operating revenue
 increased 17.9% to $168.3 million. Operating income improved to $1.9
 million from a $14.0 million loss in the fourth quarter of 2005, while net
 income improved to $3.6 million from a $13.8 million loss. Due to
 accumulated losses, Midwest Air Group discontinued recording federal income
 tax benefit on losses in second quarter 2004 and state income tax benefit
 on losses in second quarter 2005. During 2006, the company recorded
 alternative minimum tax expense, offset by the favorable resolution of tax
 contingencies previously accrued. Diluted earnings per share were $0.16,
 compared with a $0.79 loss in the same quarter a year earlier.
     The revenue increase reflects a 16.3% increase in passenger traffic,
 due to strong customer demand in response to competitive pricing, as well
 as schedule and service enhancements. A 0.9% increase in revenue yield was
 driven by improvements in the company's revenue management processes and a
 reduction in industry capacity. Total operating expenses increased 6.2%,
 due primarily to the 6.2% increase in capacity and increased flight
 operations, which led to increases in fuel expense; salary, wages and
 benefits; aircraft rentals; and commissions. Fuel expense increased $2.9
 million, or 5.3% - including $0.9 million of favorable price impact
 (calculated by applying 2005 prices to actual gallons consumed in 2006 and
 comparing the result to actual 2006 expense). Fuel expense includes the
 effect of hedging, which negatively affected fuel cost by $2.7 million in
 the quarter.
     For the full year, operating revenue increased 27.1% to $664.5 million.
 Operating income improved to $0.6 million from a $65.2 million loss in
 2005, while net income improved to $5.4 million from a $64.9 million loss
 the previous year. Diluted earnings per share rose to $0.29 from a $3.71
 loss. Results for 2005 included an impairment charge due to the planned
 retirement of two aircraft, as well as capitalized expense write-offs, a
 litigation settlement, severance costs and a change in employee vacation
 policy totaling $0.98 per share.
     The company ended the year with $157.7 million in cash, of which $118.1
 million was unrestricted. Total cash was up from $137.8 million at December
 31, 2005; unrestricted cash was up from $99.0 million at the same date.
 Capital spending - net of credits used to fund such spending - resulted in
 a cash outlay of $13.5 million for the year and consisted primarily of the
 acquisition of two Fairchild 328JETs, a spare Boeing 717 engine and
 additional spare parts for the Boeing 717 fleet.
     Midwest continues to post sizeable gains in market share in its
 Milwaukee and Kansas City hubs. In November 2006, the most recent month for
 which market share results are available:
     -- Midwest Airlines and Midwest Connect carried 52.2% of all passengers
        departing from Milwaukee, up from 50.4% in the same month a year
        earlier. In November 2006, the airlines transported 148,691 Milwaukee
        passengers, up 2.3% from 145,376 passengers in November 2005.
     -- In Kansas City, Midwest Airlines market share rose to 10.8% for
        November from 8.9% in the same month a year earlier. In November 2006,
        Midwest Airlines carried a total of 48,837 Kansas City passengers, up
        35.4% from 36,068 passengers in November 2005.
 
     Midwest Airlines
     At Midwest Airlines, passenger revenue per scheduled service available
 seat mile increased 13.1% in fourth quarter 2006 compared with the same
 quarter a year earlier. Load factor increased 6.7 percentage points due to
 a 17.5% increase in passenger traffic on a 7.0% increase in capacity.
 Revenue yield increased 2.9%.
     Into-plane fuel prices decreased 1.3% in fourth quarter 2006, averaging
 $2.09 per gallon versus $2.12 per gallon in fourth quarter 2005, and
 resulted in a $0.7 million favorable price impact. Fuel consumption
 increases resulted in a $4.0 million unfavorable impact in the quarter,
 primarily as a result of the increase in the number of flight operations.
     In the fourth quarter, cost per available seat mile (unit costs) at
 Midwest Airlines increased $0.0031 to $0.1121, or 2.9% (excluding fuel,
 increased $0.0029 to $0.0725, or 4.2%) compared with fourth quarter 2005.
     Note: Cost per available seat mile excluding fuel expense is an
 industry measurement that provides management and investors the ability to
 track changes in cost absent fuel-related expenses.
     Midwest Connect
     At Midwest Connect, passenger revenue per scheduled service available
 seat mile increased 5.1% in the fourth quarter. Passenger traffic increased
 0.6% on a 4.0% decrease in capacity, resulting in a 3.1 percentage point
 improvement in load factor, while revenue yield increased 0.3%. Cost per
 available seat mile decreased $0.0129 to $0.2931, or 4.2% (excluding fuel,
 decreased $0.0115 to $0.2225, or 4.9%) compared with fourth quarter 2005.
 Excluding fuel, the increase was due primarily to labor costs associated
 with ramp functions performed for Midwest Airlines; the transfer of ramp
 and dining services functions to Midwest Connect in mid-2005 has reduced
 the total cost of these services to Midwest Air Group. Into-plane fuel
 prices decreased 2.7% in fourth quarter 2006, averaging $2.13 per gallon
 versus $2.19 per gallon in fourth quarter 2005. Fuel consumption decreases
 resulted in a $0.2 million favorable impact quarter over quarter.
     Highlights and Outlook
 
     In the fourth quarter of 2006:
     -- Midwest Airlines selected SkyWest Airlines, Inc. to operate 50-seat
        regional jet service beginning in April 2007. SkyWest will operate a
        minimum of 15 and up to 25 Canadair regional jets for Midwest during
        the five-year term of the agreement. Flying as Midwest Connect, the
        SkyWest jets will allow Midwest to add new destinations, increase
        frequency on existing routes and upgrade regional routes to all-jet
        service. The new regional jet program is an essential component of
        Midwest's 2007 growth plans.
     -- Midwest Airlines signed a letter of intent to acquire two additional
        MD-80 series jet aircraft, expanding its fleet of MD-80s from 11 to 13.
        The airline plans to put the planes into revenue service by mid-2007.
     -- Skyway Airlines completed the purchase of a Fairchild 328JET regional
        jet, which will enter service in first quarter 2007.
     -- Midwest Air Group increased the number of directors on its board from
        eight to nine, and elected James R. Boris to the new position. He is
        chairman of JB Capital Management, LLC, a private investment firm.
     -- Midwest Airlines began offering complimentary canine travel packs to
        dogs checking in with their owners for travel on the airline. The pack
        is an enhancement to the airline's popular Premier Pet Program, the
        first program of its kind to offer frequent flying pets that travel
        with their owners the opportunity to earn free travel.
     -- Midwest Airlines re-launched Best Care News, its newsletter for
        frequent flyers, in a monthly all-electronic format - reaching more
        people, more frequently, in a more cost-effective manner.
     -- Midwest Airlines launched a blog that provides travel tips and tourist
        information on the cities served by the airline. Geared toward women
        traveling together or in groups, "Travels With Tish - Girlfriends
        Getaway Guide" can be accessed at
        http://girlfriendsgetaway.wordpress.com.
     -- Skyway Airlines was awarded the Diamond Award, the top honor in the
        Federal Aviation Administration's Aviation Maintenance Technician
        awards program. The award recognizes exemplary training of maintenance
        technicians.
     Additionally, Midwest enhanced schedules and upgraded equipment on a
 number of routes:
     -- Midwest Airlines enhanced its flight schedule in two key markets:
        Kansas City - New York La Guardia with a fifth daily nonstop and Kansas
        City - Milwaukee with an eighth daily nonstop. In addition to offering
        travelers a more flexible and convenient schedule on the routes, the
        new service also provides significantly more connection opportunities
        through Kansas City.
     -- Midwest Airlines enhanced service between Milwaukee and Florida, adding
        second daily seasonal nonstop roundtrips to Ft. Myers, Ft. Lauderdale
        and Tampa. The airline also launched new daily nonstop service between
        Kansas City and Ft. Myers and added seasonal nonstop daily frequency
        between Kansas City and both Ft. Lauderdale and Orlando.
     -- Midwest Connect upgraded service in its Milwaukee-Appleton, Milwaukee -
        Columbus, Milwaukee - Dayton markets to regional jets, as well as one
        additional Milwaukee - Grand Rapids daily roundtrip.
 
     In the first quarter of 2007:
     Midwest Airlines has announced a number of service expansions that are
 part of its 2007 strategic growth plan.
     -- On March 4, Midwest Connect plans to launch nonstop service between
        Milwaukee and Duluth/Superior. The new service will be aboard the
        airline's quick and comfortable Fairchild 328JET aircraft. On the same
        day, the airline will also upgrade its Milwaukee-St. Louis service to
        the regional jets.
     -- On April 1, Midwest Airlines plans to introduce service to
        Seattle/Tacoma, the 49th destination on Midwest's nationwide route
        network. The airline will offer nonstop Signature Service - featuring
        two-by-two wide leather seats and generous legroom on new Boeing 717
        aircraft - from Kansas City, with easy connections to and from
        Milwaukee.
     Going forward, Hoeksema said Midwest is committed to creating long-term
 value while continuing to provide the superior customer service that its
 customers expect. "Our long-term strategic plan provides significant
 opportunities to continue to improve profitability, including a 15%
 increase in capacity in 2007 and an average increase of 10% per year over
 the next three years. And our customers will benefit from aggressive route
 expansion and equipment upgrades in 2007, as well as the addition of at
 least six new destinations and as many as 12 new routes."
     For the full year of 2007, Midwest is projecting non-GAAP net earnings
 per diluted share to be in excess of $1.70. Midwest is also projecting that
 2007 revenues will exceed $825 million and 2007 EBITDAR will exceed $140
 million. GAAP (Generally Accepted Accounting Principles) net earnings per
 diluted share in 2007 will include expenses relating to the unsolicited
 exchange offer by AirTran and other items that are not currently
 determinable, but may be significant. For that reason, Midwest is unable to
 provide full-year GAAP net earnings at this time.
     EBITDAR (earnings before interest, taxes, depreciation, amortization
 and rent) is considered to be a non-GAAP financial measure.
     Midwest believes that these non-GAAP measures, when presented in
 conjunction with comparable GAAP measures, are useful because that
 information is an appropriate measure for evaluating Midwest's operating
 performance as these costs are not directly attributable to the underlying
 performance of its business operations. Internally, Midwest uses this
 non-GAAP information as an indicator of business performance and
 management's effectiveness. These measures should be considered in addition
 to, not a substitute for, or superior to, measures of financial performance
 prepared in accordance with GAAP.
     Midwest Air Group issued a separate news release today describing the
 position of its board of directors regarding AirTran's unsolicited exchange
 offer.
     Management of Midwest Air Group will discuss the company's financial
 results and its board's position on the exchange offer in a conference call
 with industry analysts and institutional investors at 11 a.m. Eastern time
 today. The discussion will be available simultaneously in a listen-only
 mode and for the following 30 days at
 http://phx.corporate-ir.net/phoenix.zhtml?c=88626&p=irol-irhome.
     Midwest Airlines features jet service throughout the United States,
 including Milwaukee's most daily nonstop flights and best schedule to major
 destinations. Catering primarily to business travelers and discerning
 leisure travelers, the airline earned its reputation as "The best care in
 the air" by providing passengers with impeccable service and onboard
 amenities at competitive fares. Skyway Airlines, Inc. - Midwest's wholly
 owned subsidiary - operates as Midwest Connect and offers connections to
 Midwest Airlines as well as point-to-point service between select markets
 on regional jet and turboprop aircraft. Together, the airlines offer
 service to 49 cities. More information is available at
 http://www.midwestairlines.com.
     This document contains forward-looking statements about the results
 expected under the company's strategic plan and that otherwise may state
 the company's or management's intentions, hopes, beliefs, expectations or
 predictions for the future. Words such as "projecting," "expect,"
 "anticipate," "believe," "estimate," "goal," "plan," "objective" or similar
 words are intended to identify forward-looking statements. It is important
 to note that the company's actual results could differ materially from the
 projected results contained in these forward-looking statements. Factors
 that may cause such a difference to occur include, but are not limited to,
 fees and expenses incurred in connection with AirTran's unsolicited
 exchange offer and the risk factors described in "Item 1A. Risk Factors" in
 the company's "Annual Report on Form 10-K" for the year ended December 31,
 2005.
                              MIDWEST AIR GROUP, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except per share amounts)
                                    (Unaudited)
 
                                              Three Months Ended
                                                 December 31,        % Change
                                                                       Better/
                                              2006         2005       (Worse)
 
     Operating revenues:
          Passenger service                 $147,033     $125,279      17.4%
          Cargo                                3,122        1,831      70.5%
          Other                               18,167       15,656      16.0%
            Total operating revenues         168,322      142,766      17.9%
 
     Operating expenses:
          Salaries, wages and benefits        40,541       37,240      (8.9%)
          Aircraft fuel and oil               57,121       54,229      (5.3%)
          Commissions                          4,559        3,694     (23.4%)
          Dining services                      1,973        2,186       9.8%
          Station rental, landing and
           other fees                         13,039       13,240       1.5%
          Aircraft maintenance, materials
           and repairs                        12,934       13,142       1.6%
          Depreciation and amortization        3,945        3,646      (8.2%)
          Aircraft rentals                    16,442       13,872     (18.5%)
          Impairment loss                          0            0        NM
          Other                               15,861       15,473      (2.5%)
            Total operating expenses         166,415      156,722      (6.2%)
     Operating income/(loss)                   1,907      (13,956)       NM
 
     Other (expense)/income:
          Interest income                      2,089        1,016     105.7%
          Interest expense                      (792)        (908)     12.8%
            Total other (expense)/income       1,297          108        NM
 
     Income/(loss) before income tax           3,204      (13,848)       NM
     Income tax (benefit)                       (403)           0        NM
 
     Net income/(loss)                        $3,607     $(13,848)       NM
 
     Income/(loss) per common share -
      basic:                                   $0.19       $(0.79)       NM
     Income/(loss) per common share -
      diluted:                                 $0.16       $(0.79)       NM
 
     Weighted average shares - basic      18,888,835   17,553,323
     Weighted average shares - diluted    25,154,682   17,553,323
 
     See notes to unaudited condensed consolidated financial statements.
 
 
                              MIDWEST AIR GROUP, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except per share amounts)
                                    (Unaudited)
 
                                               Twelve Months Ended
                                                   December 31,       % Change
                                                2006         2005      Better/
                                                                       (Worse)
 
     Operating revenues:
          Passenger service                   $588,242     $459,652     28.0%
          Cargo                                  9,444        6,323     49.4%
          Other                                 66,815       57,014     17.2%
            Total operating revenues           664,501      522,989     27.1%
 
     Operating expenses:
          Salaries, wages and benefits         160,060      147,010     (8.9%)
          Aircraft fuel and oil                232,013      178,079    (30.3%)
          Commissions                           18,018       13,784    (30.7%)
          Dining services                        8,397        9,622     12.7%
          Station rental, landing and
           other fees                           51,562       46,282    (11.4%)
          Aircraft maintenance, materials
           and repairs                          51,451       51,823      0.7%
          Depreciation and amortization         15,178       16,001      5.1%
          Aircraft rentals                      64,215       51,468    (24.8%)
          Impairment loss                            0       15,622       NM
          Other                                 63,015       58,466     (7.8%)
            Total operating expenses           663,909      588,157    (12.9%)
     Operating income/(loss)                       592      (65,168)   100.9%
 
     Other (expense)/income:
          Interest income                        7,701        3,723    106.8%
          Interest expense                      (3,284)      (3,581)     8.3%
            Total other (expense)/income         4,417          142       NM
 
     Income/(loss) before income tax             5,009      (65,026)      NM
     Income tax (benefit)                         (403)        (140)   187.9%
 
     Net income/(loss)                          $5,412     $(64,886)      NM
 
 
     Income/(loss) per common share -
      basic:                                     $0.30       $(3.71)      NM
     Income/(loss) per common share -
      diluted:                                   $0.29       $(3.71)      NM
 
     Weighted average shares - basic        18,117,907   17,508,360
     Weighted average shares - diluted      24,033,540   17,508,360
 
     See notes to unaudited condensed consolidated financial statements.
 
 
                              MIDWEST AIR GROUP, INC.
                                OPERATING STATISTICS
 
                                                 Three Months Ended
                                                    December 31,
                                              2006               2005
     Midwest Air Group
     Scheduled Service Revenue
      Passenger Miles (000s)                1,004,520           863,436
     Scheduled Service Available
      Seat Miles (000s)                     1,360,608         1,281,191
     Total Available Seat Miles (000s)      1,371,308         1,299,289
     Load Factor (%)                             73.8%             67.4%
     Revenue Yield                            $0.1464           $0.1451
     Passenger Revenue per Schd. Svc. ASM     $0.1081           $0.0978
     Total Revenue per Total ASM              $0.1227           $0.1099
     Total Cost per Total ASM                 $0.1214           $0.1206
     Total Cost per Total ASM
      (ex-fuel cost) (1)                      $0.0797           $0.0789
     Number of Flights                         27,126            27,163
     Into-plane Fuel Cost per Gallon            $2.10             $2.13
     Full-time Equivalent Employees
      at End of Period                          3,020             2,906
     Aircraft in Service at End of Period          55                55
 
     Midwest Airlines Operations
     Origin & Destination
      Passengers                              893,265           778,121
     Scheduled Service Revenue
      Passenger Miles (000s)                  942,840           802,119
     Scheduled Service Available
      Seat Miles (000s)                     1,268,643         1,185,368
     Total Available Seat Miles (000s)      1,279,342         1,203,466
     Load Factor (%)                             74.3%             67.7%
     Revenue Yield                            $0.1316           $0.1279
     Passenger Revenue per Schd. Svc. ASM     $0.0978           $0.0865
     Total Revenue per Total ASM              $0.1144           $0.1005
     Total Cost per Total ASM                 $0.1121           $0.1089
     Total Cost per Total ASM (ex-
      fuel cost) (1)                          $0.0725           $0.0696
     Average Passenger Trip Length (miles)      1,055             1,031
     Number of Flights                         13,877            12,653
     Into-plane Fuel Cost per Gallon            $2.09             $2.12
     Full-time Equivalent Employees
      at End of Period                          2,101             1,905
     Aircraft in Service at End of Period          36                34
 
     Midwest Connect Operations
     Origin & Destination Passengers          194,613           200,273
     Scheduled Service Revenue
      Passenger Miles (000s)                   61,681            61,317
     Scheduled Service Available
      Seat Miles (000s)                        91,965            95,823
     Total Available Seat Miles (000s)         91,965            95,823
     Load Factor (%)                             67.1%             64.0%
     Revenue Yield                            $0.3717           $0.3705
     Passenger Revenue per Schd. Svc. ASM     $0.2493           $0.2371
     Total Revenue per Total ASM              $0.2818           $0.2662
     Total Cost per Total ASM                 $0.2931           $0.3060
     Total Cost per Total ASM
      (ex-fuel cost) (1)                      $0.2225           $0.2339
     Average Passenger Trip Length (miles)        317               306
     Number of Flights                         13,249            14,510
     Into-plane Fuel Cost per Gallon            $2.13             $2.19
     Full-time Equivalent Employees
      at End of Period                            919             1,001
     Aircraft in Service at End of Period          19                21
 
 
                                                 Twelve Months Ended
                                                     December 31,
                                              2006                2005
     Midwest Air Group
     Scheduled Service Revenue
      Passenger Miles (000s)               4,086,394           3,363,995
     Scheduled Service Available
      Seat Miles (000s)                    5,362,671           4,740,662
     Total Available Seat Miles (000s)     5,421,119           4,799,932
     Load Factor (%)                            76.2%               71.0%
     Revenue Yield                           $0.1440             $0.1366
     Passenger Revenue per Schd.
      Svc. ASM                               $0.1097             $0.0970
     Total Revenue per Total ASM             $0.1226             $0.1090
     Total Cost per Total ASM                $0.1225             $0.1225
     Total Cost per Total ASM
      (ex-fuel cost) (1)                     $0.0797             $0.0854
     Number of Flights                       110,120             106,042
     Into-plane Fuel Cost per
      Gallon                                   $2.17               $1.86
     Full-time Equivalent Employees
      at End of Period                         3,020               2,906
     Aircraft in Service at End of Period         55                  55
 
     Midwest Airlines Operations
     Origin & Destination Passengers       3,621,048           3,009,082
     Scheduled Service Revenue
      Passenger Miles (000s)               3,827,111           3,121,785
     Scheduled Service Available
      Seat Miles (000s)                    4,982,631           4,358,678
     Total Available Seat Miles (000s)     5,040,712           4,417,682
     Load Factor (%)                            76.8%               71.6%
     Revenue Yield                           $0.1285             $0.1193
     Passenger Revenue per Schd. Svc. ASM    $0.0987             $0.0854
     Total Revenue per Total ASM             $0.1135             $0.0994
     Total Cost per Total ASM                $0.1127             $0.1121
     Total Cost per Total ASM
     (ex-fuel cost) (1)                      $0.0722             $0.0773
     Average Passenger Trip Length (miles)     1,057               1,038
     Number of Flights                        54,213              46,492
     Into-plane Fuel Cost per Gallon           $2.16               $1.85
     Full-time Equivalent Employees
      at End of Period                         2,101               1,905
     Aircraft in Service at End of Period         36                  34
 
     Midwest Connect Operations
     Origin & Destination Passengers         819,946             820,487
     Scheduled Service Revenue
      Passenger Miles (000s)                 259,283             242,210
     Scheduled Service Available
      Seat Miles (000s)                      380,040             381,983
     Total Available Seat Miles (000s)       380,407             382,251
     Load Factor (%)                            68.2%               63.4%
     Revenue Yield                           $0.3719             $0.3606
     Passenger Revenue per Schd. Svc. ASM    $0.2537             $0.2286
     Total Revenue per Total ASM             $0.2851             $0.2471
     Total Cost per Total ASM                $0.2936             $0.2698
     Total Cost per Total ASM
      (ex-fuel cost) (1)                     $0.2210             $0.2065
     Average Passenger Trip Length (miles)       316                 295
     Number of Flights                        55,907              59,550
     Into-plane Fuel Cost per Gallon           $2.21               $1.91
     Full-time Equivalent Employees
      at End of Period                           919               1,001
     Aircraft in Service at End of Period         19                  21
 
     (1) Non-GAAP measurement.
     Note: All statistics exclude charter operations except the following:
 Total Available Seat Miles ("ASMs"), Total Cost per Total ASM, Total Cost
 per ASM (ex-fuel cost), Into-plane Fuel Cost, Number of Employees and
 Aircraft in Service. Aircraft acquired but not yet placed into service are
 excluded from the aircraft in service statistics.
     Numbers in this table may not be recalculated due to rounding.
 
 
                              MIDWEST AIR GROUP, INC.
                            NON-GAAP FINANCIAL MEASURES
 
                                               Three Months Ended
                                                   December 31,
                                                2006         2005         %
     Midwest Air Group
     Total GAAP operating expenses ($000)     $166,415     $156,722     6.2%
     ASMs (000)                              1,371,308    1,299,289     5.5%
     CASM                                      $0.1214      $0.1206     0.6%
 
     Total GAAP operating expenses ($000)     $166,415     $156,722     6.2%
     Less: aircraft fuel ($000)                $57,121      $54,229     5.3%
 
     Operating expenses excluding fuel ($000) $109,294     $102,493     6.6%
     ASMs (000)                              1,371,308    1,299,289     5.5%
     CASM excluding fuel                       $0.0797      $0.0789     1.0%
 
 
     Midwest Airlines Operations
     Total GAAP operating expenses ($000)     $143,396     $131,111     9.4%
     ASMs (000)                              1,279,342    1,203,466     6.3%
     CASM                                      $0.1121      $0.1089     2.9%
 
     Total GAAP operating expenses ($000)     $143,396     $131,111     9.4%
     Less: aircraft fuel ($000)                $50,625      $47,320     7.0%
 
     Operating expenses excluding fuel ($000)  $92,772      $83,792    10.7%
     ASMs (000)                              1,279,342    1,203,466     6.3%
     CASM excluding fuel                       $0.0725      $0.0696     4.2%
 
 
     Midwest Connect Operations
     Total GAAP operating expenses ($000)      $26,957      $29,325    (8.1%)
     ASMs (000)                                 91,965       95,823    (4.0%)
     CASM                                      $0.2931      $0.3060    (4.2%)
 
     Total GAAP operating expenses ($000)      $26,957      $29,325    (8.1%)
     Less: aircraft fuel ($000)                 $6,497       $6,909    (6.0%)
 
     Operating expenses excluding fuel ($000)  $20,460      $22,417    (8.7%)
     ASMs (000)                                 91,965       95,823    (4.0%)
     CASM excluding fuel                       $0.2225      $0.2339    (4.9%)
 
 
                                              Twelve Months Ended
                                                  December 31,
                                              2006           2005         %
     Midwest Air Group
     Total GAAP operating expenses ($000)     $663,909     $588,157    12.9%
     ASMs (000)                              5,421,119    4,799,932    12.9%
     CASM                                      $0.1225      $0.1225    (0.1%)
 
     Total GAAP operating expenses ($000)     $663,909     $588,157    12.9%
     Less: aircraft fuel ($000)               $232,013     $178,079    30.3%
 
     Operating expenses excluding fuel
      ($000)                                  $431,897     $410,078     5.3%
     ASMs (000)                              5,421,119    4,799,932    12.9%
     CASM excluding fuel                       $0.0797      $0.0854    (6.7%)
 
     Midwest Airlines Operations
     Total GAAP operating expenses ($000)     $568,259     $495,418    14.7%
     ASMs (000)                              5,040,712    4,417,682    14.1%
     CASM                                      $0.1127      $0.1121     0.5%
 
     Total GAAP operating expenses ($000)     $568,259     $495,418    14.7%
     Less: aircraft fuel ($000)               $204,399     $153,859    32.8%
 
     Operating expenses excluding fuel
      ($000)                                  $363,860     $341,559     6.5%
     ASMs (000)                              5,040,712    4,417,682    14.1%
     CASM excluding fuel                       $0.0722      $0.0773    (6.6%)
 
     Midwest Connect Operations
     Total GAAP operating expenses ($000)     $111,677     $103,141     8.3%
     ASMs (000)                                380,407      382,251    (0.5%)
     CASM                                      $0.2936      $0.2698     8.8%
 
     Total GAAP operating expenses ($000)     $111,677     $103,141     8.3%
     Less: aircraft fuel ($000)                $27,614      $24,220    14.0%
 
     Operating expenses excluding fuel
      ($000)                                   $84,063      $78,921     6.5%
     ASMs (000)                                380,407      382,251    (0.5%)
     CASM excluding fuel                       $0.2210      $0.2065     7.0%
 
     Note:  Numbers and totals in this table may not be recalculated due to
     rounding and intercompany eliminations.
 
 SOURCE Midwest Air Group, Inc.