Midwest Express says Elite Airways owes it $150,000

Ended agreement with Maine-based airline on Dec. 31, lawsuit states

Midwest Express Airlines airplane.
Midwest Express Airlines airplane.

Last updated on March 10th, 2020 at 09:31 pm

In a complaint filed in Milwaukee County Circuit Court on Monday, Milwaukee-based Midwest Express Airlines Inc. alleges that it is owed $150,000 by Portland, Maine-based Elite Airways LLC.

Midwest Express is a startup company led by a group trying to relaunch the brand, which was eliminated in 2011 after Midwest Airlines (originally known as Midwest Express) was merged into Denver-based Frontier Airlines.

As part of their efforts to launch, Midwest Express entered into an airline services agreement with Elite Airways, in which Elite would provide aircraft, pilots, flight crews and maintenance for Midwest Express, to get the new airline off the ground. That agreement began on July 31, 2019, according to the complaint filed by Midwest Express.

As part of the agreement, Midwest made a monetary deposit with Elite, the agreement states. It does not state the amount of the deposit.

Initially, Midwest Express executives said they planned to begin service during the fourth quarter. But the launch date has been delayed and the new airline has still not begun service.

In August, Midwest Express and Elite Airways unveiled the aircraft for the new Midwest Express and announced that initial destinations would be from Milwaukee to Omaha, Nebraska; Grand Rapids, Michigan; and Cincinnati. At the press conference, John Pearsall, president of Elite Airways, said, “We think it’s going to be a great partnership.”

But Midwest Express terminated its agreement with Elite Airways on Dec. 31, the company’s complaint states. Neither the complaint, nor a press release issued by Midwest Express, explains the reason for the termination of the agreement.

The agreement requires Elite to return Midwest’s deposit if either party terminates the agreement, Midwest Express states in its complaint.

The complaint states that Elite has “only returned a portion” of Midwest Express’s deposit and states that Elite still owes Midwest $150,000.

“Elite…breached the agreement by failing to immediately return Midwest’s entire deposit,” the complaint states. “Midwest has made multiple demands of Elite since the termination. Elite has met each demand with a promise to return the deposit as soon as possible, but has failed to follow through as promised each and every time.”

A representative for Elite Airways could not immediately be reached for comment on the lawsuit and the termination of its agreement with Midwest Express.

A spokesperson for Midwest Express said the company would have no additional comments beyond a press release the company issued on Monday.

In that press release, Midwest Express president Greg Aretakis said the new Midwest Express is still moving forward with plans to relaunch service.

“We are in substantial discussions with other airline operators to bring back non-stop service to Milwaukee,” he said. “We have received a tremendous amount of support from the business community and former passengers who tell us that they need better options for air travel in Milwaukee, and we intend to deliver it.”

Midwest Express is continuing efforts to raise capital, the company said in Monday’s press release. A date has not yet been set for the start of service, it also said.

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.

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