<PAGE>

                                                                CONFORMED COPY
                                                                --------------


                          ENGINE WARRANTY ASSIGNMENT
                                   [N586ML]


                                    between


                          MIDWAY AIRLINES CORPORATION



                                      and


               FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION,
                        not in its individual capacity
                          but solely as Owner Trustee



                                      and



                           GENERAL ELECTRIC COMPANY


                  ENGINE MANUFACTURER'S CONSENT AND AGREEMENT
<PAGE>

          THIS ENGINE WARRANTY ASSIGNMENT [N586ML] is made as of this 10/th/ day
of December, 1999 between MIDWAY AIRLINES CORPORATION, a Delaware corporation
(the "Assignor") and FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a national
banking association, not in its individual capacity but solely as Owner Trustee
(the "Assignee").


                             W I T N E S S E T H:
                             - - - - - - - - - -


          WHEREAS, the Assignor and General Electric Company (the "Engine
Manufacturer") are parties to the General Terms Agreement, providing, among
other things, for product support, including warranties for the support, of the
Engines covered thereby and related equipment given to the Assignor by the
Engine Manufacturer;

          WHEREAS, the Assignee wishes to acquire certain rights and interests
in and to warranties relating to the Engines and the Assignor, on the terms and
conditions hereinafter set forth, is willing to assign to the Assignee such
rights and interests of the Assignor in and to such warranties, and the Assignee
is willing to accept such assignment, as hereinafter set forth; and

          WHEREAS, the Engine Manufacturer is willing to execute and deliver to
the Assignee an Engine Manufacturer's Consent and Agreement (the "Engine
Manufacturer's Consent and Agreement") to the provisions hereof in substantially
the form of the Annex hereto.

          IT IS HEREBY AGREED as follows:

          In consideration of the mutual covenants herein contained and of the
Assignee's agreement in the Purchase Agreement Assignment to pay the purchase
price for the Aircraft on the terms and conditions therein stated, the parties
hereto agree as follows:

            1. Definitions
               -----------

          1.1  For all purposes of this Assignment, except as otherwise
expressly provided or unless the context otherwise requires, the following terms
shall have the following meanings:

          "Aircraft" means One Canadair Regional Jet Aircraft Model CL-600-2B19
           --------
bearing manufacturer's serial number 7341 including two General Electric CF34-
3B1 turbofan engines bearing manufacturer's serial numbers GE-E-872580 and GE-E-
872581 respectively (collectively the "Engines"), installed on such aircraft at
the time of delivery.

          "Aircraft Purchase Agreement" means the Bombardier Regional Aircraft
           ---------------------------
Division Purchase Agreement No. PA-0393 dated September 17, 1997, as amended,
between the Assignor

                                       2
<PAGE>

and the Manufacturer (including all exhibits thereto, together with all letter
agreements entered into that by their terms constitute part of any such Aircraft
Purchase Agreement) whereby, inter alia, the Manufacturer has agreed to sell and
the Assignor has agreed to purchase the Aircraft.

          "CF34 Warranty" means the CF34 Turbofan Engine Airline Operator
           -------------
Warranty from the Engine Manufacturer, dated May 22, 1990, as contained in
Exhibit B of the General Terms Agreement.

          "Engine Manufacturer" means General Electric Company, a New York
           -------------------
corporation, and its successors and assigns.

          "Event of Default" has the meaning given to such term in Section 16 of
           ----------------
the Lease.

          "General Terms Agreement" means the General Terms Agreement No. CF34-
           -----------------------
0897-065 entered into as of 25 May 1998 between the Engine Manufacturer and the
Assignor, including Article XIV (Limitation of Liability), but excluding any and
all letter agreements attached thereto.

          "Lease" means the lease agreement [N586ML] dated as of December 10,
           -----
1999 as the same may be amended, modified or supplemented, between the Assignee,
as lessor, and the Assignor, as lessee, providing for the lease of the
Aircraft.

          "Manufacturer" means with respect to the Aircraft or Airframe,
           ------------
Bombardier Inc., a Canadian corporation represented by its Bombardier Regional
Aircraft Division, and its successor and assigns.

          "Purchase Agreement Assignment" means the Purchase Agreement
           -----------------------------
Assignment dated as of December 10, 1999, between the Assignor and Assignee as
the same may be amended, modified or supplemented from time to time, together
with the Consent and Agreement thereto executed by the Manufacturer.

          "Warranties" means all warranties or assurances of any kind whatsoever
           ----------
relating to the Engines and related equipment manufactured by the Engine
Manufacturer contained in the CF34 Warranty and as limited by the applicable
terms of the General Terms Agreement.

          1.2  All other capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in Appendix A to the Lease
(including definitions incorporated therein by reference to another document).

                                       3
<PAGE>

          2.   Assignment and Authorization of Assignor
               ----------------------------------------

          2.1  The Assignor does hereby sell, assign, transfer and set over unto
the Assignee, its successors and permitted assigns, all of the Assignor's rights
and interests in and to the Warranties as and to the extent that the same relate
to the Engines and the operation thereof, except as and to the extent expressly
reserved below, including, without limitation, in such assignment, (a) all
claims for damages in respect of any Engine arising as a result of any default
by the Engine Manufacturer in respect of the Warranties under the CF34 Warranty
and/or the General Terms Agreement, and (b) any and all rights of the Assignor
to compel performance of the terms of the CF34 Warranty and/or the General Terms
Agreement in respect of the Warranties; reserving exclusively to the Assignor,
however, (i) all of the Assignor's rights and interests in and to the CF34
Warranty and/or the General Terms Agreement as and to the extent that the same
relate to engines other than the Engines and the purchase and operation of such
engines, and (ii) any and all letter agreements, "concessions" and/or "special
guarantees" (as defined in the General Terms Agreement). The Assignee hereby
accepts such assignment.

          2.2  Notwithstanding the foregoing, unless an Event of Default shall
have occurred and be continuing and the Assignee shall have commenced the
exercise of remedies set forth in Section 17 of the Lease, the Assignee hereby
authorizes the Assignor, to exercise in the Assignor's name all rights in
respect of the Warranties, except that:  the Assignor may not enter into any
change order or other amendment, modification or supplement to the CF34 Warranty
and/or the General Terms Agreement in respect of any Warranties without the
prior written consent or countersignature of the Assignee if such change, order,
amendment, modification or supplement would result in any reduction in the scope
of the Warranties, rescission, cancellation or termination of the CF34 Warranty
and/or the General Terms Agreement (to the extent it relates to any applicable
Warranties) or otherwise adversely affect Assignee's rights assigned hereunder.

          2.3  For all purposes of this Assignment, the Engine Manufacturer
shall not be deemed to have knowledge of and need not recognize the occurrence,
the continuance or the discontinuance of any Event of Default under the Lease,
or the exercise of remedies set forth in Section 17 of the Lease by the
Assignee, unless and until the Engine Manufacturer shall have received from the
Assignee written notice thereof addressed to the Engine Manufacturer's Manager
of Small Commercial Engine Contracts, G.E. Aircraft Engines, 1000 Western
Avenue, Lynn, Massachusetts, 01910, U.S.A., and, in acting in acquittance with
the CF34 Warranty, the General Terms Agreement and this Assignment, the Engine
Manufacturer may conclusively rely on such notice.  Until such time as notice
shall have been given by the Assignee to the Engine Manufacturer that an Event
of Default has occurred and is continuing and the Assignee has commenced the
exercise of remedies set forth in Section 17 of the Lease, the Engine
Manufacturer shall with respect to the Warranties deal solely and exclusively
with the Assignor.  The Assignee shall promptly after all such Events of Default
shall have been remedied, give written notice of the same to the Engine
Manufacturer's Manager of Small Commercial Engine Contracts as provided above,
with a copy to

                                       4
<PAGE>

the Assignor at its address for notices set forth in Section 23(a) of the Lease,
and upon the Engine Manufacturer's receipt of such notice, the Engine
Manufacturer shall, in the absence of a notice from the Assignee to the Engine
Manufacturer that an Event of Default has occurred and is continuing and the
Assignee has commenced the exercise of remedies set forth in Section 17 of the
Lease, resume the sole and exclusive dealings with the Assignor authorized by
this Clause 2 and by the Engine Manufacturer's Consent and Agreement.

          2.4  The Assignment contained herein shall apply only to the Engines
(as installed on the Aircraft at the time of delivery) and shall not extend to
any replacement or substitute engine, unless and until the Engine Manufacturer
has received written notice thereof.  The Engine Manufacturer shall not be
deemed to have knowledge of the replacement or substitution of an Engine due to
a Failure (as such term is defined in the CF34 Warranty, excluding normal wear,
tear and deterioration which can be restored by overhaul or repair), damage or
loss, until notified of such Failure, damage or loss.  Notice shall be sent to:
Engine Manufacturer's Manager of Small Commercial Engine Contracts.  Such notice
shall contain the serial number of the replaced or substituted Engine, the
serial number of the new engine and confirmation that such new engine shall be
subject to the terms and conditions of this Assignment.

          3.   Assignor's Continuing Obligations
               ---------------------------------

          3.1  It is expressly agreed that, anything herein contained to the
contrary notwithstanding:  (a) on or prior to the Delivery Date for the Aircraft
under the Purchase Agreement Assignment, the Assignor will perform its
obligations with respect to the Engines to be performed by it on or before such
Delivery Date, (b) the Assignor shall at all times remain liable to the Engine
Manufacturer under the terms and conditions of the General Terms Agreement to
perform all duties and obligations of the Assignor thereunder to the same extent
as if this Assignment had not been executed, (c) the exercise by the Assignee of
any of the rights assigned hereunder shall not release the Assignor from any of
its duties or obligations to the Engine Manufacturer under the General Terms
Agreement, except to the extent that such exercise by the Assignee shall
constitute performance of such duties and obligations, (d) after the Delivery
Date for the Aircraft, the Assignor will exercise its rights and perform its
obligations under the General Terms Agreement in respect of the Engines to the
extent that such rights and obligations have not been assigned hereunder, and
(e) except as specifically provided in Clause 3.2 with respect to the Assignee,
the Assignee shall not have any obligation or liability under the General Terms
Agreement by reason of or arising out of this Assignment or be obligated to
perform any of the obligations or duties of the Assignor under the General Terms
Agreement or to make any payment or to make any inquiry as to the sufficiency of
any payment received by it or to present or file any claim or to take any other
action to collect or enforce any claim for any payment assigned hereunder.

          3.2  Anything contained in this Assignment to the contrary
notwithstanding (but without in any way releasing the Assignor from any of its
duties or obligations under the General

                                       5
<PAGE>

Terms Agreement), the Assignee confirms expressly for the benefit of the Engine
Manufacturer that, in exercising any rights in and to the Warranties, or in
making any claim with respect thereto, the applicable terms and conditions of
the General Terms Agreement, including Article XIV (Limitation of Liability) and
the Warranties shall apply to, and be binding upon, the Assignee to the same
extent as the Assignor. Nothing contained herein shall in any way diminish or
limit the provisions of the Assignor's indemnities in the Lease and the
Participation Agreement and in the Aircraft Purchase Agreement with respect to
any liability of the Assignee to the Manufacturer in any way relating to or
arising out of the Purchase Agreement Assignment.

          3.3  Nothing contained herein shall subject the Engine Manufacturer to
any obligation or liability to which it would not otherwise be subject under the
General Terms Agreement or modify in any respect the contract rights of the
Engine Manufacturer thereunder or subject the Engine Manufacturer to any
multiple or duplicative obligation or liability under the General Terms
Agreement or limit any rights of set-off the Engine Manufacturer may have
against the Assignor under applicable law.  No further assignment of the
Warranties, including but not limited to assignments for security purposes, are
permitted without the express prior written consent of the Engine Manufacturer,
other than an assignment to ICX Corporation as the Owner Participant whereby
such consent is not required.

          3.4  Effective at any time after an Event of Default shall have
occurred and be continuing and the Assignee shall have commenced the exercise of
remedies set forth in Section 17 of the Lease, the Assignor does hereby
constitute the Assignee, its successors and permitted assigns, the Assignor's
true and lawful attorney, irrevocably, with full power (in the name of the
Assignor or otherwise) to ask, require, demand, receive, compound and give
acquittance for any and all monies and claims for monies due or to become due
under, or arising out of, the General Terms Agreement in respect of such Engine,
but only to the extent that the same have been expressly assigned by this
Assignment and, for such period as the Assignee may exercise rights with respect
thereto under this Assignment, to endorse any checks or other instruments or
orders in connection therewith and to file any claims or take any action or
institute (or, if previously commenced, assume control of) any proceedings and
to obtain any recovery in connection therewith that the Assignee may deem to be
necessary or advisable with respect to such monies and claims for monies.

          3.5  So long as the Engine Manufacturer acts in good faith in
accordance with this Assignment, the Engine Manufacturer may rely conclusively
on any notice given by the Assignee hereunder without inquiring as to the
accuracy of, or the entitlement of the Assignee to give, such notice.

          4.   Further Assurance
               -----------------

          4.1  The Assignor agrees that at any time and from time to time, upon
the written request of the Assignee, the Assignor, at its own cost and expense,
will promptly and duly execute

                                       6
<PAGE>

and deliver any and all such further instruments and documents and take such
further action as the Assignee may reasonably request in order to obtain the
full benefits of this Assignment and of the rights and powers herein granted.

          5.   Representations, Warranties and Covenants
               -----------------------------------------

          5.1  The Assignor does hereby represent and warrant that the General
Terms Agreement and the CF34 Warranty are in full force and effect as to the
Assignor and are enforceable against the Assignor in accordance with their
respective terms.  The Assignor further represents and warrants that it has,
with the authorized execution of the Engine Manufacturer's Consent and
Agreement, received all necessary consents to the assignment and transfer
contemplated herein.

          5.2  The Assignor does hereby represent and warrant that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as this Assignment shall remain in effect, the whole or any part of the
Warranties hereby assigned to anyone other than the Assignee.

          5.3  The Assignee agrees that it will not enter into any agreement
with the Engine Manufacturer that would amend, modify, rescind, cancel or
terminate the General Terms Agreement and/or the CF34 Warranty in respect of the
Warranties or take other action to amend, modify, rescind, cancel or terminate
any of the Assignor's rights in respect of the Warranties, without the prior
written consent of the Assignor, except if the Engine Manufacturer shall have
been notified in writing by the Assignee that an Event of Default has occurred
and is continuing and the Assignee has commenced the exercise of remedies set
forth in Section 17 of the Lease.

          5.4  Each of the Assignor, the Assignee and the Engine Manufacturer
agrees that neither this Assignment nor the attached and incorporated Engine
Manufacturer's Consent and Agreement, nor any of the terms or provisions of this
Assignment or the Engine Manufacturer's Consent and Agreement, may be amended,
extended, modified, supplemented, terminated or waived orally.  Any and all
amendments, extensions, modifications, supplements, terminations or waivers must
be presented to each of the other parties in writing, and be signed by the party
against whom the enforcement of such amendment, modification, supplement,
termination or waiver is sought to be charged.

          6.   Confidentiality
               ---------------

          6.1  The Assignee agrees, that it will not, without the prior written
consent of the Engine Manufacturer, disclose, directly or indirectly, to any
third party any terms of the CF34 Warranty disclosed to it in writing by the
Engine Manufacturer; provided that (a) the Assignee may use, retain and disclose
any such information to its special counsel and public accountants and to bank
examiners and auditors, each of whom shall be obligated to not further disclose
such terms, (b)

                                       7
<PAGE>

the Assignee may disclose any such information to the Owner Participant and its
attorneys and accountants, each of whom shall be obligated to not further
disclose such terms, (c) the Assignee may disclose any such information as
required by applicable laws or governmental regulations, provided that the
Assignee shall first, to the extent practicable, have given the Engine
Manufacturer reasonable opportunity, at the Engine Manufacturer's cost and
expense, to obtain a protective order or other reasonably satisfactory assurance
of confidential treatment for the information required to be disclosed, (d) to
the extent that the Assignee may have received a subpoena or other written
demand under color of legal right for such information, the Assignee may
disclose such information, but it shall first, as soon as practicable upon
receipt of such demand and to the extent permitted by applicable laws, furnish a
copy thereof to the Assignor and to the Engine Manufacturer, and the Assignee
shall afford the Assignor and the Engine Manufacturer reasonable opportunity, at
the moving person's cost and expense, to obtain a protective order or other
reasonably satisfactory assurance of confidential treatment for the information
required to be disclosed, and (e) the Assignee may disclose any such information
to any potential purchaser of the Aircraft and/or the Engine (subject to
execution by such prospective purchaser of a written confidentiality statement
setting forth the same or substantially similar terms as those referred to in
this paragraph).

          7.   Miscellaneous
               -------------

          7.1  This Assignment may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.

          7.2  This Assignment shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance.  This Assignment is being
delivered in the State of New York.

          7.3  First Union Trust Company, National Association is entering into
this Assignment solely as Owner Trustee under the Trust Agreement and not in its
individual capacity and neither First Union Trust Company, National Association
nor any entity acting as successor Owner Trustee or additional Owner Trustee
under the Trust Agreement shall be personally liable for, or for any loss in
respect of, any of the statements, representations, warranties, agreements or
obligations stated to be those of the Assignee hereunder, as to which all
interested parties shall look solely to the Trust Estate, except to the extent
expressly provided otherwise in the other Operative Agreements, provided
                                                                --------
however, that nothing in this Section 7.3 shall be construed to limit in scope
-------
or substance the liability of First Union Trust Company, National Association or
any entity acting as successor Owner Trustee or additional Owner Trustee under
the Trust Agreement in its individual capacity for the consequences of its own
willful misconduct or gross negligence or (in receiving, handling or remitting
funds) its simple negligence, or the inaccuracy or breach of its
representations, warranties or covenants made in such capacity in any other
Operative Agreements.

                                       8
<PAGE>

          7.4  All notices hereunder shall be given in the manner set forth in
Section 12.01 of the Participation Agreement.


*                             *                              *

                                       9
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Engine
Warranty Assignment to be duly executed as of the day and year first above
written.


                              MIDWAY AIRLINES CORPORATION,
                              as Assignor



                              By:   /s/ Jonathan S. Waller
                                    ----------------------
                                    Name:  Jonathan S. Waller
                                    Title: Senior Vice President
                                           General Counsel


                              FIRST UNION TRUST COMPANY, NATIONAL
                              ASSOCIATION, not in its individual capacity
                              but solely as Owner Trustee,
                              as Assignee

                              By:   /s/ Sterling C. Correia
                                    -----------------------
                                    Name:  Sterling C. Correia
                                    Title: Vice President

                                       10
<PAGE>

                                     ANNEX


                           GENERAL ELECTRIC COMPANY

             ENGINE MANUFACTURER'S CONSENT AND AGREEMENT [N586ML]
             ----------------------------------------------------


          The undersigned, GENERAL ELECTRIC COMPANY, a New York corporation (the
"Engine Manufacturer"), hereby acknowledges notice of and consents to all of the
terms of the Engine Warranty Assignment [N586ML] (herein called the
"Assignment", the defined terms therein being hereinafter used with the same
meaning), dated as of December 10, 1999, between MIDWAY AIRLINES CORPORATION, a
Delaware corporation, as Assignor and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Owner Trustee, as Assignee, relating to the assignment by the Assignor
of, its rights and interests in the Warranties, and hereby confirms to the
Assignee that:  (i) all the Warranties given by the Engine Manufacturer under
the CF34 Warranty and/or the General Terms Agreement with respect to the Engines
shall, subject to the terms and conditions thereof and of the Assignment inure
to the benefit of the Assignee to the same extent as if the Assignee had
originally been a party thereto except as provided by Clause 2 of the
Assignment; (ii) the Assignee shall not be liable for any of the obligations or
duties of the Assignor under the General Terms Agreement in respect of the
Engines, and the Assignment shall not give rise to any duties or obligations
whatsoever on the part of the Assignee owing to the Engine Manufacturer, except
for the Assignee's agreement in the Assignment with respect to the Engines to
the effect that, in exercising any right in and to the Warranties, or in making
any claim with respect thereto, the applicable terms and conditions of the
General Terms Agreement including Article XIV (Limitation of Liability) shall
apply to, and be binding upon, the Assignee to the same extent as the Assignor,
and with respect to such agreement the Engine Manufacturer agrees that, anything
contained in the General Terms Agreement or the Assignment to the contrary
notwithstanding, the Assignee shall have no liability to the Engine Manufacturer
for failure to comply with any of the terms of the General Terms Agreement with
respect to the Warranties while under the Lease to the Assignor so long as the
Assignee acts upon the written instructions of the Assignor (to which
instructions the undersigned understands that it shall have access on request);
provided, that no person other than the Engine Manufacturer or any assignee of
the Engine Manufacturer as permitted under the General Terms Agreement shall
have any rights against the Assignee with respect to the undertaking and
agreement set forth in this clause (ii); (iii) the Engine Manufacturer consents
to the execution of the Lease; (iv) the Engine Manufacturer agrees that the
Assignment constitutes an agreement permitted by the General Terms Agreement and
pursuant to and in accordance with the provisions of the General Terms
Agreement, the Engine Manufacturer consents to the assignment of Assignor's
interest in and to the Warranties as and to the extent that the same relate to
the Engines and the operation thereof to Assignee pursuant to the Assignment;
and (v) the Engine Manufacturer will continue to pay to the Assignor all
payments which the Engine Manufacturer may be required to make under the

                                       1
<PAGE>

General Terms Agreement in respect of the Warranties unless and until the Engine
Manufacturer shall have received written notice from the Assignee addressed to
the Engine Manufacturer's Manager of Small Commercial Engine Contracts, G.E.
Aircraft Engines, 1000 Western Avenue, Lynn, Massachusetts, 01910, U.S.A., that
an Event of Default has occurred and is continuing and the Assignee has
commenced the exercise of remedies set forth in Section 17 of the Lease (which
such notice shall be conclusive proof thereof between the Engine Manufacturer
and the Assignor), whereupon the Engine Manufacturer will, until the Assignee
shall have notified the Engine Manufacturer in writing that no such Event of
Default is continuing and remains unremedied, make any and all payments and take
all actions which it may be required thereafter to make or take under CF34
Warranty and/or the General Terms Agreement in respect of the Warranties and the
right to receive which has been assigned to the Assignee under the Assignment
directly to the Assignee at its address as from time to time notified to the
Engine Manufacturer in writing.

          The Engine Manufacturer hereby represents and warrants (a) the Engine
Manufacturer is a corporation organized and existing in good standing under the
law of the State of New York, (b) the making and performance in accordance with
the respective terms of the General Terms Agreement, the CF34 Warranty and this
Engine Manufacturer's Consent and Agreement have been duly authorized by all
necessary corporate action on the part of the Engine Manufacturer, do not
require any stockholder approval, contravene the Engine Manufacturer's
certificate of incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which the Engine Manufacturer is a party or by
which it is bound and do not, as to the making thereof, contravene any law
binding on the Engine Manufacturer, and, as to the best knowledge of the Engine
Manufacturer, do not, to the performance thereof, contravene any law binding on
the Engine Manufacturer, (c) to the best of the Engine Manufacturer's knowledge,
all applicable provisions of the General Terms Agreement and the CF34 Warranty
have been compiled with to effect the assignment to the Assignee of the
Warranties contemplated by the Assignment, and (d) the General Terms Agreement
and the CF34 Warranty constituted, as of the date thereof and at all times
thereafter to and including the date of this Engine Manufacturer's Consent and
Agreement the legal, valid and binding obligations of the Engine Manufacturer
enforceable against the Engine Manufacturer in accordance with their respective
terms, and this Engine Manufacturer's Consent and Agreement is the legal, valid
and binding obligation of the Engine Manufacturer, enforceable against the
Engine Manufacturer in accordance with its terms subject to:  (i) the
limitations of applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting the rights of creditors generally,
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), which principles do not make
the remedies available at law or in equity with respect to the General Terms
Agreement or this Engine Manufacturer's Consent and Agreement inadequate for the
practical realization of the benefits intended to be provided thereby.
Notwithstanding any provision to the contrary in this Engine Manufacturer's
Consent and Agreement or the Assignment, nothing contained in this Engine
Manufacturer's Consent and Agreement or the Assignment shall subject the Engine
Manufacturer to any obligation or liability to which it would not otherwise be
subject under the General Terms Agreement or modify

                                       2
<PAGE>

in any respect the Engine Manufacturer's contract rights thereunder or subject
the Engine Manufacturer to any multiple or duplicative obligation or liability
under the General Terms Agreement.

          It is understood that the execution by the Engine Manufacturer, and
validity, of this Engine Manufacturer's Consent and Agreement is subject to the
condition that, upon the delivery of the Aircraft (including the Engines) by the
Assignor to the Assignee and the acceptance thereof by the Assignee pursuant to
the Purchase Agreement Assignment, the Assignee shall lease such Aircraft
(including the Engines) to the Assignor under the Lease.

          This Engine Manufacturer's Consent and Agreement shall be governed by,
and construed in accordance with, the law of the State of New York, U.S.A.


*                             *                              *

                                       3
<PAGE>

          IN WITNESS WHEREOF, the Engine Manufacturer has caused this Engine
Manufacturer's Consent and Agreement to be duly executed as of December 10,
1999.


                         GENERAL ELECTRIC COMPANY



                         By:  ____________________________________
                              Name:
                              Title:

                                       4
<PAGE>

                           GENERAL ELECTRIC COMPANY

             ENGINE MANUFACTURER'S CONSENT AND AGREEMENT [N586ML]
             ----------------------------------------------------


          The undersigned, GENERAL ELECTRIC COMPANY, a New York corporation (the
"Engine Manufacturer"), hereby acknowledges notice of and consents to all of the
terms of the Engine Warranty Assignment [N586ML] (herein called the
"Assignment", the defined terms therein being hereinafter used with the same
meaning), dated as of December 10, 1999, between MIDWAY AIRLINES CORPORATION, a
Delaware corporation, as Assignor and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Owner Trustee, as Assignee, relating to the assignment by the Assignor
of, its rights and interests in the Warranties, and hereby confirms to the
Assignee that:  (i) all the Warranties given by the Engine Manufacturer under
the CF34 Warranty and/or the General Terms Agreement with respect to the Engines
shall, subject to the terms and conditions thereof and of the Assignment inure
to the benefit of the Assignee to the same extent as if the Assignee had
originally been a party thereto except as provided by Clause 2 of the
Assignment; (ii) the Assignee shall not be liable for any of the obligations or
duties of the Assignor under the General Terms Agreement in respect of the
Engines, and the Assignment shall not give rise to any duties or obligations
whatsoever on the part of the Assignee owing to the Engine Manufacturer, except
for the Assignee's agreement in the Assignment with respect to the Engines to
the effect that, in exercising any right in and to the Warranties, or in making
any claim with respect thereto, the applicable terms and conditions of the
General Terms Agreement including Article XIV (Limitation of Liability) shall
apply to, and be binding upon, the Assignee to the same extent as the Assignor,
and with respect to such agreement the Engine Manufacturer agrees that, anything
contained in the General Terms Agreement or the Assignment to the contrary
notwithstanding, the Assignee shall have no liability to the Engine Manufacturer
for failure to comply with any of the terms of the General Terms Agreement with
respect to the Warranties while under the Lease to the Assignor so long as the
Assignee acts upon the written instructions of the Assignor (to which
instructions the undersigned understands that it shall have access on request);
provided, that no person other than the Engine Manufacturer or any assignee of
the Engine Manufacturer as permitted under the General Terms Agreement shall
have any rights against the Assignee with respect to the undertaking and
agreement set forth in this clause (ii); (iii) the Engine Manufacturer consents
to the execution of the Lease; (iv) the Engine Manufacturer agrees that the
Assignment constitutes an agreement permitted by the General Terms Agreement and
pursuant to and in accordance with the provisions of the General Terms
Agreement, the Engine Manufacturer consents to the assignment of Assignor's
interest in and to the Warranties as and to the extent that the same relate to
the Engines and the operation thereof to Assignee pursuant to the Assignment;
and (v) the Engine Manufacturer will continue to pay to the Assignor all
payments which the Engine Manufacturer may be required to make under the General
Terms Agreement in respect of the Warranties unless and until the Engine
Manufacturer shall have received written notice from the Assignee addressed to
the Engine Manufacturer's
<PAGE>

Manager of Small Commercial Engine Contracts, G.E. Aircraft Engines, 1000
Western Avenue, Lynn, Massachusetts, 01910, U.S.A., that an Event of Default has
occurred and is continuing and the Assignee has commenced the exercise of
remedies set forth in Section 17 of the Lease (which such notice shall be
conclusive proof thereof between the Engine Manufacturer and the Assignor),
whereupon the Engine Manufacturer will, until the Assignee shall have notified
the Engine Manufacturer in writing that no such Event of Default is continuing
and remains unremedied, make any and all payments and take all actions which it
may be required thereafter to make or take under CF34 Warranty and/or the
General Terms Agreement in respect of the Warranties and the right to receive
which has been assigned to the Assignee under the Assignment directly to the
Assignee at its address as from time to time notified to the Engine Manufacturer
in writing.

          The Engine Manufacturer hereby represents and warrants (a) the Engine
Manufacturer is a corporation organized and existing in good standing under the
law of the State of New York, (b) the making and performance in accordance with
the respective terms of the General Terms Agreement, the CF34 Warranty and this
Engine Manufacturer's Consent and Agreement have been duly authorized by all
necessary corporate action on the part of the Engine Manufacturer, do not
require any stockholder approval, contravene the Engine Manufacturer's
certificate of incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which the Engine Manufacturer is a party or by
which it is bound and do not, as to the making thereof, contravene any law
binding on the Engine Manufacturer, and, as to the best knowledge of the Engine
Manufacturer, do not, to the performance thereof, contravene any law binding on
the Engine Manufacturer, (c) to the best of the Engine Manufacturer's knowledge,
all applicable provisions of the General Terms Agreement and the CF34 Warranty
have been compiled with to effect the assignment to the Assignee of the
Warranties contemplated by the Assignment, and (d) the General Terms Agreement
and the CF34 Warranty constituted, as of the date thereof and at all times
thereafter to and including the date of this Engine Manufacturer's Consent and
Agreement the legal, valid and binding obligations of the Engine Manufacturer
enforceable against the Engine Manufacturer in accordance with their respective
terms, and this Engine Manufacturer's Consent and Agreement is the legal, valid
and binding obligation of the Engine Manufacturer, enforceable against the
Engine Manufacturer in accordance with its terms subject to:  (i) the
limitations of applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting the rights of creditors generally,
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), which principles do not make
the remedies available at law or in equity with respect to the General Terms
Agreement or this Engine Manufacturer's Consent and Agreement inadequate for the
practical realization of the benefits intended to be provided thereby.
Notwithstanding any provision to the contrary in this Engine Manufacturer's
Consent and Agreement or the Assignment, nothing contained in this Engine
Manufacturer's Consent and Agreement or the Assignment shall subject the Engine
Manufacturer to any obligation or liability to which it would not otherwise be
subject under the General Terms Agreement or modify in any respect the Engine
Manufacturer's contract rights thereunder or subject the Engine
<PAGE>

Manufacturer to any multiple or duplicative obligation or liability under the
General Terms Agreement.

          It is understood that the execution by the Engine Manufacturer, and
validity, of this Engine Manufacturer's Consent and Agreement is subject to the
condition that, upon the delivery of the Aircraft (including the Engines) by the
Assignor to the Assignee and the acceptance thereof by the Assignee pursuant to
the Purchase Agreement Assignment, the Assignee shall lease such Aircraft
(including the Engines) to the Assignor under the Lease.

          This Engine Manufacturer's Consent and Agreement shall be governed by,
and construed in accordance with, the law of the State of New York, U.S.A.


*                             *                              *
<PAGE>

          IN WITNESS WHEREOF, the Engine Manufacturer has caused this Engine
Manufacturer's Consent and Agreement to be duly executed as of December 15,
1999.


                         GENERAL ELECTRIC COMPANY



                         By:  /s/ Patricia A. Bowles
                              ----------------------
                              Name:  Patricia A. Bowles
                              Title: Contracts Manager,
                                     Attorney-In-Fact