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Automatic Pilot

Seduced by the profits to be made in the newly deregulated airline industry, upstart carriers jammed the skies in the …

Seduced by the profits to be made in the newly deregulated airline industry, upstart carriers jammed the skies in the early 1980s, luring passengers with cut-rate fares accompanied by only the obligatory packet of peanuts.

Not exactly the best time to start yet another airline-particularly one that offered its passengers Beef Wellington served on china, fresh-baked chocolate chip cookies, wider seats, and 30 percent more legroom. But that’s what Timothy Hoeksema, 49, proposed to the Kimberly Clark Corp. in 1983, when he recommended developing the company’s internal transportation subsidiary, K-C Aviation, into an airline that flies to underserved business markets. After all, man cannot survive on peanuts alone.

The plan took off. So far, $259 million Midwest Express has ridden its focus on business travelers to 11 consecutive years of profitability and an IPO last September.

“Though we have a higher cost per seat mile, our higher mix of business travelers who aren’t flying on excursion fares gives us a higher average yield,” explains Chairman, President, and CEO Hoeksema, who joined Kimberly Clark in 1969 as first officer of the company’s air transportation operations.

Though Milwaukee-based Midwest lays claim to less than one-half of 1 percent of the market share in the U.S.-providing nonstop service to selected major business destinations throughout the U.S. from only two hubs, one in Milwaukee, where it competes with Northwest, and the other in Omaha, where it’s up against United-its compounded growth rate from 1991 to 1995 is 20 percent. For the first quarter ended March 31, net income was up 55 percent from a year ago to $2.8 million.

Midwest is one of the few airlines that weathered the high-capacity, low-demand problems that have plagued the industry the past five years. Hoeksema credits Midwest‘s policy of steady, controlled growth, and says the company has plans for one additional hub within the next three to five years.

Hoeksema, who got his pilot’s license at age 16, says his flying experience forged the discipline, planning ability, and attention to detail needed to succeed in business. While he regrets not flying a plane for seven years now, he’s been too busy getting to know Midwest‘s 1,809 employees; monitoring the “Tim Line,” an employee suggestion box; and talking up his company for the IPO. “When I first started flying, I wanted to be an airline pilot, but then I began to enjoy the business aspect more,” he says. “Either way, once flying is in your blood, it never leaves.”

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