<PAGE>

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

                            SECURITY AGREEMENT AND
                  COLLATERAL ASSIGNMENT OF PURCHASE AGREEMENT
                  -------------------------------------------

          THIS SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT OF
     PURCHASE AGREEMENT (as the same may be amended, supplemented
     or otherwise modified from time to time, this "Agreement")
                                                    ---------
     is entered into as of December 22, 1999, between Midway
     Airlines Corporation ("Assignor"), and General Electric
                            --------
     Capital Corporation ("Assignee"). Unless otherwise defined
                           --------
     herein, capitalized terms used herein shall have the meaning
     set forth in Section 1 hereof.

                                   RECITALS:

     A.   Assignor and The Boeing Company ("Manufacturer"), entered into the
                                            ------------
Purchase Agreement (as defined below), relating to the acquisition by Assignor
of certain Boeing Model 737-7BX aircraft from Manufacturer, including the
Aircraft (as defined herein).

     B.   As security for its obligations under the Loan Agreement (as defined
herein), Assignor is willing to grant to Assignee a security interest in, and to
assign to Assignee, Assignor's rights, interests, duties and obligations under
the Purchase Agreement and Assignee is willing to accept such security interest
and assignment, on the terms set forth herein.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained the parties agree as follows:

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

          Aircraft -the first four Boeing Model 737-700 aircraft delivered under
          --------
          the Purchase Agreement which, as currently scheduled for delivery,
          bear manufacturer's serial numbers 30736, 30737, 30738 and 30739,
          including the aircraft engines installed in such aircraft on the date
          of delivery thereof pursuant to the Purchase Agreement.

          Loan Agreement - shall mean the Loan Agreement dated as of December
          --------------
          22, 1999 by and between Assignor and Assignee, as the same may be
          amended, supplemented or otherwise modified from time to time.

          Collateral - shall have the meaning assigned to such term in Section
          ----------
          2.

          Event of Default - shall have the meaning assigned to such term in the
          ----------------
          Loan Agreement.
<PAGE>

          Permitted Lien - means (x) with respect to any Collateral identified
          --------------
          in clause (b) of the Section 2, all rights of Manufacturer and (y)
          with respect to any Collateral identified in clause (c) of Section 2,
          all rights of the applicable vendor and any similar rights existing
          under applicable law.

          Purchase Agreement - the Purchase Agreement No. 2235 dated as of June
          ------------------
          11, 1999, between Manufacturer and Assignor as heretofore amended,
          modified or supplemented, providing, among other things for the
          manufacture and sale by Manufacturer of certain Boeing Model 737-700
          aircraft including the Aircraft, as the same may hereafter be amended,
          modified or supplemented to the extent permitted by the terms of the
          Purchase Agreement and this Agreement, but excluding letter agreements
          6-1162-CPJ-308 and 6-1162-CPJ-311 and paragraphs 9 and 10 of letter
          agreement 6-1162-CPJ-316.  The Purchase Agreement incorporates by
          reference the Aircraft General Terms Agreement AGTA-MID ("AGTA").

          Secured Obligations - collective reference to the unpaid principal of
          -------------------
          and interest on the Loans (as defined in the Loan Agreement) (and all
          other obligations and liabilities (including, without limitation,
          interest accruing at the then applicable rate provided in the Loan
          Agreement after the maturity of the Loans and interest accruing at the
          then applicable rate provided in the Loan Agreement after the filing
          of any petition in bankruptcy, or the commencement of any insolvency,
          reorganization or like proceeding, relating to Assignor, whether or
          not a claim for post-filing or post-petition interest is allowed in
          such proceeding), of Assignor to Assignee whether direct or indirect,
          absolute or contingent, due or to become due, or now existing or
          hereafter incurred, which may arise under, out of, or in connection
          with, the Loan Agreement, this Agreement, the Notes (as defined in the
          Loan Agreement), or any other document made, delivered or given in
          connection therewith insofar as they relate to the Aircraft, in each
          case whether on account of principal, interest, reimbursement
          obligations, fees, indemnities, costs, expenses or otherwise
          (including, without limitation, all fees and disbursements of counsel
          to Assignee that are required to be paid by Assignor pursuant to the
          terms of the Loan Agreement, this Agreement or any other Loan Document
          (as defined in the Loan Agreement)).

     2.   As collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Secured Obligations, Assignor hereby grants to Assignee a
security interest in, and assigns to Assignee, all of the following property
(whether Assignor's right, title or interest therein is now owned or hereafter
acquired) (collectively, the "Collateral"):
                              ----------

          (a)  the Purchase Agreement as and to the extent that the same relates
     to the Aircraft and the purchase and operation thereof, including, without

                                       2
<PAGE>

     limitation, (i) the right upon valid tender by Manufacturer to purchase the
     Aircraft (including the right to accept delivery of the Aircraft, such
     acceptance to be exercised by a person designated by Assignee, and acting
     as authorized representative of Assignee) and the right to take title to
     the Aircraft and to be named the "Buyer" in the bill of sale to be
     delivered by Manufacturer for the Aircraft pursuant to the Purchase
     Agreement, (ii) any and all predelivery payment refunds or other monies
     owing by Manufacturer to Assignor in the case of an Event of Default, (iii)
     all claims for damages in respect of the Aircraft arising as a result of
     any default by Manufacturer under the Purchase Agreement, including,
     without limitation, all warranty and indemnity provisions contained in the
     Purchase Agreement, and all claims arising thereunder, in respect of the
     Aircraft, (iv) all of the Assignor's rights and interests in or arising out
     of any deposits and advance payments made in respect of the Aircraft under
     the Purchase Agreement and any other payments made by the Assignor in
     respect of the Aircraft or amounts credited or to be credited by
     Manufacturer to the Assignor under the Purchase Agreement, (v) any and all
     rights of the Assignor to compel performance of the terms of the Purchase
     Agreement in respect of the Aircraft, (vi) the rights to demand, accept and
     retain all rights in and all property (other than the Aircraft), data and
     service which Manufacturer is obligated to provide or does provide pursuant
     to the Purchase Agreement in respect of the Aircraft; and (vii) the right
     to obtain data and demonstration and test flights pursuant to the Purchase
     Agreement; reserving for the Assignor, however, all duties and obligations
     of a "Customer" under the Purchase Agreement (Assignee hereby accepts the
     foregoing assignment subject to the terms hereof);

          (b)  to the extent of Assignor's right or interest therein (whether
     now existing or hereafter acquired), each of the Aircraft (including the
     airframe and the engines installed thereon) after delivery thereof by
     Manufacturer;

          (c)  all buyer furnished equipment (whether now owned or hereafter
     acquired) attached to the Aircraft furnished by or on behalf of Assignor to
     the Manufacturer to be attached to the Aircraft; and

          (d)  all "proceeds," as defined in Section 9-306(1) of the Uniform
     Commercial Code as effect in the State of New York, of any of the
     foregoing, together with, whether or not constituting proceeds under such
     Section, (i) any and all proceeds of any insurance, indemnity, warranty or
     guaranty payable with respect to any of the foregoing, (ii) any and all
     other amounts paid or payable upon the sale, exchange, or other disposition
     of any of the foregoing and (iii) any and all substitutes for, additions
     to, and products and replacements for any of the foregoing.

     3.   (a)  Notwithstanding the foregoing, if and so long as no Event of
Default shall have occurred and be continuing, Assignee hereby authorizes
Assignor, on behalf and to the exclusion of Assignee, to exercise in Assignee's
name all rights and powers of the "Customer" under the Purchase Agreement,
including such rights as Assignee may have with respect to the Aircraft under
any warranty, indemnity or

                                       3
<PAGE>

guarantee or other provision of the Purchase Agreement, and to receive any
recovery or benefit resulting from the enforcement of any warranty, guarantee or
indemnity under the Purchase Agreement in respect of the Aircraft (any such
recovery or benefit being referred to herein as a "Manufacturer's Payment or
Service"); provided, however, that, subject to Section 11 hereof, Assignor may
           --------  -------
not (x) exercise any right (i) to purchase any Aircraft, (ii) to accept delivery
of any Aircraft, or (iii) to take title to any Aircraft or to be named the
"Buyer" in the bill of sale therefor or (y) enter into any change order or other
amendment modification or supplement to the Purchase Agreement without the
written consent or countersignature of Assignee if such change order, amendment,
modification or supplement (i) would result in any rescission, cancellation or
termination of the Purchase Agreement with respect to any or all of the
Aircraft, (ii) would have the effect of changing the model of any or all of the
Aircraft (except as contemplated by the Purchase Agreement), or (iii) would have
the effect of increasing the purchase price of any of the Aircraft by more than
$500,000 or (iv) would have the effect of changing the delivery date of any of
the Aircraft by more than, in the aggregate, 90 days plus, with the prior
written consent of Assignee (which consent shall not be unreasonably withheld or
delayed), up to an additional 90 days; provided that Manufacturer shall not be
                                       --------
responsible for any delay in the manufacture or delivery of any of the Aircraft
or other things delivered or to be delivered under the Purchase Agreement that
result from or arise, out of the requirement for Assignee's written consent or
countersignature.

          (b)  Unless and until Manufacturer shall have received written notice
from Assignee, addressed as set forth herein, that an Event of Default shall
have occurred and is continuing, each Manufacturer's Payment or Service shall be
payable or rendered to Assignor.  Upon receipt by Manufacturer of written notice
from Assignee, addressed as set forth herein, that an Event of Default shall
have occurred and is continuing, each Manufacturer's Payment or Service shall be
payable or rendered to Assignee until such time as Manufacturer shall have
received written notice from Assignee that all such Events of Default have been
cured or waived.  For the avoidance of doubt, any claim for a Manufacturer's
Payment or Service made by Assignor prior to receipt by Manufacturer of notice
from Assignee of an Event of Default described above, shall remain subject to
any right of set-off Manufacturer may have against Assignor with respect to
obligations of Assignor to Manufacturer.

          (c)  If Assignee has notified Manufacturer of an Event of Default by
written notice thereof as described above, Assignee will also give prompt
written notice to Manufacturer if and when such Event of Default has been cured
or waived.

          (d)  Assignor and Assignee agree, expressly for the benefit of
Manufacturer, that for all purposes of this Agreement, Manufacturer shall not be
deemed to have knowledge of, and need not recognize any event, condition, right,
remedy or dispute affecting the interests of Assignor or Assignee hereunder or
under any other document or agreement unless and until Manufacturer shall have
received from Assignee written notice thereof addressed to its Vice President-
Contracts, Boeing Commercial Airplane Group, if by mail, at P.O. Box 3707, Mail
Code 21-34, Seattle, Washington 98124 or to 34-9430 Answerback BOEINGREN RNTN if
by telex, and in acting in

                                       4
<PAGE>

accordance with the Purchase Agreement and this Agreement Manufacturer may
conclusively rely upon such notice.

     4.   (a)  At any time after the happening of an Event of Default and for so
long as the same shall be continuing, Assignee shall be entitled (but not
obliged) without further demand, to exercise all the rights of Assignor under
the Purchase Agreement assigned herein, but only after providing notice to
Manufacturer as set forth above.

          (b)  As between Assignor and Assignee, Assignee may exercise, in
addition to all other rights and remedies granted to it in this Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under the
Uniform Commercial Code.  Without limiting the generality of the foregoing, the
Assignee, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon Assignor or any other Person except Manufacturer (all and
each of which demands, defenses, advertisements and notices are hereby waived to
the extent permitted by applicable law), may in such circumstances forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may, subject to Manufacturer's consent as provided in the
Purchase Agreement, forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of Assignee or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk.  Assignee shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in Assignor, which right or equity is
hereby waived or released.  Assignor further agrees, at Assignee's request, to
assemble the Collateral and make it available to Assignee, at places which
Assignee shall reasonably select, whether at Assignor's premises or elsewhere.
To the extent permitted by applicable law, Assignor waives all claims, damages
and demands it may acquire against Assignee arising out of the exercise by them
of any rights hereunder.  If any notice of a proposed sale or other disposition
of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.

          (c)  Assignor hereby irrevocably constitutes and appoints Assignee and
any officer or agent of Assignee upon the occurrence and during the continuance
of an Event of Default, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Assignor and in the name of Assignor or in its own name, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, Assignor hereby gives
Assignee, the power and right, on behalf of Assignor, without notice to or
assent by Assignor, to do any or all of the following: (i) at any time when an
Event of Default has

                                       5
<PAGE>

occurred and is continuing in the name of Assignor or its own name, or
otherwise, take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under or with
respect to any Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by
Assignee for the purpose of collecting any and all such moneys due under or with
respect to any Collateral whenever payable; (ii) to the extent Assignor fails to
do so upon the reasonable request of Assignee, pay or discharge taxes and Liens
levied or placed on or threatened against the Collateral, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or any part
of the premiums therefor and the costs thereof; (iii) execute, in connection
with any sale provided for herein, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and (iv)
at any time when an Event of Default has occurred and is continuing (1) direct
any party liable for any payment under any of the Collateral to make payment of
any and all moneys due or to become due thereunder directly to Assignee or as
Assignee shall direct; (2) ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral; (3) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (5) defend any suit, action or proceeding
brought against Assignor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith, to
give such discharges or releases as Assignee may deem appropriate; and (7)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Assignee were the absolute owner thereof for all purposes, and do, at Assignee's
option and Assignor's expense, at any time, or from time to time, all acts and
things which Assignee deems necessary to protect, preserve or realize upon the
Collateral and Assignee's security interest therein and to effect the intent of
this Agreement, all as fully and effectively as Assignor might do.

          (d)  The expenses of Assignee incurred in connection with actions
undertaken as provided in this Clause (4), together with interest thereon at a
rate equal to the rate per annum at which interest would then be payable on past
due amounts under Section 2.6.2 of the Credit Agreement, from the date of
payment by Assignee, to the date reimbursed by Assignor, shall be payable by
Assignor to Assignee on demand.  Assignor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof in accordance
with the terms of this Agreement.  All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.  The powers conferred on Assignee hereunder are solely to protect
Assignor's interests in the Collateral and shall not impose any duty upon
Assignee to exercise any such powers.  Assignee shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither it nor any of its officers, directors, employees or

                                       6
<PAGE>

agents shall be responsible to Assignor for any act or failure to act hereunder,
except for its own gross negligence or willful misconduct.

     5.   Assignor hereby agrees, expressly for the benefit of Manufacturer,
that notwithstanding anything contained herein to the contrary: (i) the Assignor
shall at all times remain liable to Manufacturer under the Purchase Agreement to
perform all obligations of "Customer" thereunder to the same extent as if this
Agreement had not been executed; and (ii) the exercise by Assignee of any of the
rights assigned hereunder shall not release the Assignor from any of its duties
or obligations to Manufacturer under the Purchase Agreement except to the extent
that such exercise by Assignee shall constitute performance of such duties and
obligations.  Assignor hereby agrees to indemnify and hold harmless Assignee
from and against any and all liability for Assignor's performance (or failure to
perform) under the Purchase Agreement.

     6.   Assignee hereby agrees, expressly for the benefit of Manufacturer,
that, notwithstanding anything contained herein to the contrary (and without in
any way releasing the Assignor from any of its duties or obligations under the
Purchase Agreement), insofar as the provisions of the Purchase Agreement relate
to any or all of the Aircraft, in exercising any rights under the Purchase
Agreement, or in making any claim with respect to any or all of the Aircraft or
other things (including, without limitation, data, documents, training and
services) delivered or to be delivered pursuant to the Purchase Agreement, the
terms and conditions of the Purchase Agreement including, without limitation,
the DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in
    ----------------------     --------------------------------------------
Article 11 of Part 2 of Exhibit C to the AGTA which was incorporated by
reference into the Purchase Agreement and the insurance and indemnity provisions
in Article 8.2 of the AGTA which were incorporated by reference into the
Purchase Agreement, shall apply to, and be binding upon, Assignee to the same
extent as if Assignee had been the original "Customer" thereunder.  Assignee
further agrees, expressly for the benefit of Manufacturer, that at any time and
from time to time upon written request of Manufacturer, Assignee shall promptly
and duly execute and deliver any and all such further assurances, instruments
and documents and take all such further action as Manufacturer may reasonably
request in order to obtain the full benefits of Assignee's agreements set forth
in this paragraph.

     7.   Assignor and Assignee agree expressly for the benefit of Manufacturer,
that, subject to the terms of the Consent, nothing contained herein shall
subject Manufacturer to any liability to which it would not otherwise be subject
under the Purchase Agreement or modify in any respect Manufacturer's contract
rights thereunder or require Manufacturer to divest itself of title to or
possession of the Aircraft until delivery thereof and payment therefor as
provided in the Purchase Agreement or to take any action with respect to the
Purchase Agreement or the Aircraft in any manner inconsistent with applicable
law (including, without limitation, any bankruptcy or other court order, ruling
or finding).

     8.   At any time and from time to time upon the written request of
Assignee, the Assignor will promptly and duly execute and deliver any and all
such further

                                       7
<PAGE>

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

     9.   Assignor does hereby represent and warrant to Assignee that:  (i) it
has good and valid rights in the Collateral described in Section 2(a) hereof
with respect to which it has purported to grant a security interest hereunder
and has full power and authority to grant to Assignee the security interest in
all of its right, title and interest (whether now existing or hereafter
acquired) in the Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the
consent or approval of any other person other than any consent or approval which
has been obtained; (ii) as to Assignor, the Purchase Agreement is in full force
and effect and is enforceable in accordance with its terms; (iii) except to the
extent then cured or waived by Manufacturer, Assignor is not in default under
the Purchase Agreement and, as such, has not failed to perform or observe any
material term and is not entitled to make any material reduction in payment
thereunder; (iv) the copy of the Purchase Agreement previously provided to
Assignee is a true, correct and complete copy of such agreement as of December
22, 1999; (v) Assignor has not assigned or pledged to any third party the whole
or any part of the rights and interests assigned pursuant to Section 2; (vi) the
Collateral is free and clear of any lien (other than the lien of this Agreement
and Permitted Liens); (vii) there is no effective financing statement or
analogous document under the Uniform Commercial Code or any other applicable
laws covering any Collateral; and (viii) the security interests granted pursuant
to this Agreement (a) constitute perfected security interests in the Collateral
(to the extent of Assignor's interest therein) in favor of the Lender, as
collateral security for the Secured Obligations and (b) are prior to all other
Liens (other than Permitted Liens) on the Collateral in existence on the date
hereof.

     10.  Assignor hereby covenants to Assignee that as long as this Agreement
shall remain in effect:  (i) it will not assign or pledge the whole or any part
of the rights assigned as provided in paragraph 2 hereof, nor will it cause the
creation of liens on, or otherwise dispose of, the Collateral; (ii) it will, at
its own cost and expense, take any and all actions necessary to defend its right
and, if applicable, title to the Collateral against all persons and to defend
the security interest of the Assignee in the Collateral and the priority thereof
against any lien; and (iii) it will, at its own expense, execute, acknowledge,
deliver and cause to be duly filed all such further instruments and document and
take all such actions as the Assignee may from time to time request to better
assure, preserve, protect and perfect the security interest granted herein and
the rights and remedies created hereby, including the payment of any fees and
taxes required in connection with the execution and delivery of this Agreement,
the granting of the security interest and the filing of any financing statements
or other documents in connection herewith or therewith.

     11.  So long as no Default then exists, Assignee agree that upon Assignor's
payment in full of the principal of and accrued interest on Loans relating to
any Aircraft, Assignee will execute such documents and take such other actions,
in each case at

                                       8
<PAGE>

Assignor's expense, as Assignor may reasonably request in order to release the
lien of this Agreement to the extent applicable to such Aircraft.

     12.  This Agreement shall in all respects be governed by, and construed in
accordance with, the laws of the State of New York, except to the extent where
those laws are governed by the federal laws of the United States, including all
matters of construction, validity, and performance.

     13.  This Agreement may be executed by the parties 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.

                                       9
<PAGE>

          IN WITNESS WHEREOF, the parties hereto, each pursuant to due
authority, have each caused this Security Agreement and Collateral Agreement of
Purchase Agreement to be executed by their duly authorized officers as of the
date and year first above written.


ASSIGNOR:                           MIDWAY AIRLINES CORPORATION


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


ASSIGNEE:                           GENERAL ELECTRIC CAPITAL
                                     CORPORATION


                                    By: /s/ Norman Liu
                                        --------------
                                        Name: Norman Liu
                                        Title: Vice President

                                      10
<PAGE>

                            CONSENT AND AGREEMENT
                         to the Security Agreement and
                Collateral Assignment of the Purchase Agreement
                -----------------------------------------------


          THIS CONSENT AND AGREEMENT ("Consent") is entered into as of December
22, 1999 by and among Midway Airlines Corporation ("Midway"), General Electric
Capital Corporation ("Assignee") and The Boeing Company ("Manufacturer").

          RECITALS
          --------

     A.   Midway and Assignee have heretofore entered into that certain Loan
Agreement, pursuant to which Assignee and the members of the syndicate
identified therein (if applicable) have agreed to make certain funds available
to Midway in order to enable Midway to meet its deposit and advance payment
obligations in respect of the Aircraft (as defined in the Collateral Assignment,
defined below) under the Purchase Agreement.

     B.   Midway and Assignee have entered into that certain Security Agreement
and Collateral Assignment of Purchase Agreement dated as of December 22, 1999
("Collateral Assignment"), pursuant to which, among other things, Midway has
granted to Assignee a security interest in all of Midway's right and interest in
and to the Purchase Agreement in order to secure performance of Midway under and
in respect of the Loan Agreement.

     C.   Midway and Assignee wish to obtain Manufacturer's consent to the
Collateral Assignment and Manufacturer is willing to grant such consent, all
subject to and upon the terms and conditions provided herein.

          NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:

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

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Collateral Assignment.

2.   Consent of Manufacturer.
     -----------------------

     (a)  Manufacturer hereby acknowledges notice of the Collateral Assignment
and consents, subject to the terms and conditions of this Consent, to assignment
to Assignee of all of Midway's right and interest in and to the Purchase
Agreement pursuant to the Collateral Assignment.

                                      A-1
<PAGE>

     (b)  Manufacturer agrees that this Consent constitutes the consent of
Manufacturer as required by the Purchase Agreement.

3.   Assignee's Rights under the Collateral Assignment.
     -------------------------------------------------

     (a)  Event of Default.  Manufacturer acknowledges that, subject to the
          ----------------
provisions of Paragraph 4 hereof, upon and after notice to Manufacturer by
Assignee that an Event of Default under the Collateral Assignment has occurred
and is continuing and that it is exercising its rights and remedies under the
Collateral Assignment (and until Manufacturer receives a further written notice
from Assignee to the effect that Midway may again exercise the rights of
"Customer" under the Purchase Agreement), Assignee shall be entitled to make all
demands, give all notices, take all actions and exercise all rights of
"Customer" under and subject to the Purchase Agreement and Midway shall not be
entitled to do so.

     (b)  Termination of Purchase Agreement by Manufacturer. Manufacturer agrees
          -------------------------------------------------
 that upon termination of the Purchase Agreement with respect to the rights
 related to any one or more of the Aircraft, (i) it shall give Assignee written
 notice of such termination; and (ii) Assignee shall have the right, within ten
 (10) business days of receipt of such notice, subject to the provisions of
 Paragraph 4 of this Consent, to give Manufacturer written notice of its
 irrevocable decision to assume all of the obligations of "Customer" under the
 terminated Purchase Agreement insofar as it relates to any or all of the
 Aircraft by entering into a substitute purchase agreement with Manufacturer,
 relating to such Aircraft on terms and conditions substantially equivalent to
 those set out in the Purchase Agreement. If Assignee does so notify
 Manufacturer and enter into a substitute purchase agreement, then, subject to
 the terms of the Collateral Assignment and Paragraphs 4 and 7 of this Consent,
 Assignee shall be entitled to make all demands, give all notices, take all
 actions and exercise all rights of Customer under and subject to the substitute
 purchase agreement. If no notice from Assignee is timely received, Midway and
 Assignee will be deemed to have waived all rights thereto. In such case,
 Manufacturer shall be entitled but not obliged to purchase from Assignee or
 Midway, as applicable, all buyer furnished equipment related to the terminated
 Aircraft under the Purchase Agreement, in which Assignee or Midway, as
 appropriate, has title or an uncontested right to title.

4.   Manufacturer's Purchase Option.
     ------------------------------

     Prior to the exercise of its rights and remedies under Section 4 of the
Collateral Assignment as a result of the occurrence of an Event of Default
thereunder, Assignee shall notify Manufacturer in writing. Manufacturer shall
have the option (the "Manufacturer's Option"), exercisable at any time within
ten (10) Business Days following receipt by Manufacturer of such notice, to
purchase Assignee's interest in the Purchase Agreement (without recourse,
representation or warranty of any kind) insofar as it relates to all of the
Aircraft not yet delivered thereunder at the time of exercise of Manufacturer's
Option. In the event that Manufacturer notifies Assignee that it intends

                                      A-2
<PAGE>

to exercise Manufacturer's Option, Manufacturer shall purchase Assignee's
interest in the Purchase Agreement (without recourse, representation or warranty
of any kind) insofar as it relates to all, but not less than all, of the
Aircraft not yet delivered thereunder at the time of exercise of Manufacturer's
Option by paying to Assignee within five (5) Business Days following the date of
its notice to Assignee, an amount equaling the aggregate amount of deposits and
advances made under the Purchase Agreement with respect to all of the Aircraft
not yet delivered thereunder up to the time of exercise of Manufacturer's
Option. If Manufacturer fails to exercise Manufacturer's Option during such ten
(10) Business Day period, Assignee may exercise its rights under the Collateral
Assignments.

5.   Midway's Waiver and Indemnity; No Release from Obligations.
     ----------------------------------------------------------

     (a)  Midway hereby waives any rights which it may have pursuant to contract
or law or otherwise against Manufacturer arising out of, or resulting from, the
exercise by Assignee of its rights and remedies under the Collateral Assignment
or this Consent and agrees to indemnify and hold harmless Manufacturer, its
successors and assigns, and their respective officers, directors and employees
from and against any and all claims, losses or liabilities (including reasonable
attorneys' fees) resulting therefrom, provided, however, that Midway will not
                                      --------  -------
indemnify and hold harmless such parties in the event that such parties are
determined, by a final judgment of a court of competent jurisdiction, to have
acted with gross negligence with regard to the matter for which indemnification
is sought.

     (b)  Midway hereby agrees, expressly for the benefit of Manufacturer, that
notwithstanding anything contained in the Collateral Assignment to the contrary:
(i) Midway shall at all times remain liable to Manufacturer under the Purchase
Agreement to perform all duties and obligations of the "Customer" thereunder in
respect of the Aircraft to the same extent as if the Collateral Assignment and
this Consent had not been executed, and (ii) the exercise by Assignee of any
rights assigned under the Collateral Assignment shall not release Midway from
any of its duties or obligations to Manufacturer under the Purchase Agreement
except to the extent that such exercise by Assignee shall constitute performance
of such duties or obligations.

6.   Notices.
     -------

     (a)  Midway and Assignee agree, expressly for the benefit of Manufacturer,
that for all purposes of the Collateral Assignment, Manufacturer shall not be
deemed to have knowledge of and need not recognize any event, condition, right,
remedy or dispute affecting the interests of Midway or Assignee under the
Collateral Assignment unless and until Manufacturer shall have received written
notice thereof from Assignee addressed to its Vice President-Contracts, Boeing
Commercial Airplane Group, if by mail, at P.O. Box 3707, Mail Code 21-34,
Seattle, Washington 98124 or to 32-9430 Answerback BOEINGREN RNTN, if by telex.
In acting in accordance with the

                                      A-3
<PAGE>

Purchase Agreement and this Consent, Manufacturer may rely conclusively upon any
such notice.

     (b)  Manufacturer shall be entitled to rely conclusively upon any notice or
instruction received by it from Assignee pursuant to the Collateral Assignment
or this Consent, and Manufacturer shall have no obligation to inquire as to the
accuracy of such notice or instruction or as to the relative priority of rights
of any person asserting rights in and to the Purchase Agreement and the
Aircraft.

     (c)  Except as provided in Paragraph 3 of this Consent, unless and until
Assignee shall have notified Manufacturer that it is exercising its rights and
remedies under the Collateral Assignment, Midway shall have all rights and
obligations of "Customer" under the Purchase Agreement and Manufacturer shall
have no duty to consult with or otherwise deal with Assignee concerning the
Purchase Agreement or the Aircraft. Without limiting the generality of the
foregoing, prior to the receipt of Assignee's written notice that it is
exercising its remedies under the Collateral Assignment, as provided in
Paragraph 3(a) hereof, Manufacturer shall have no obligation to inquire as to
whether Midway has complied with the provisions of the Collateral Assignment and
shall be entitled to rely upon any notice, consent, waiver or other action taken
by Midway in connection with the Purchase Agreement.

     (d)  Notice to Assignee hereunder shall be given by hand, by first class,
certified or registered mail, by a recognized overnight courier service or by
telecopier (confirmed by mail or overnight courier) at General Electric Capital
Corporation, c/o GE Capital Aviation Services, Inc., 201 High Ridge Road,
Stamford, Connecticut  06927, Attention Contracts Leader, Telecopy:  (203) 357-
3201.

7.   Rights Subject to the Purchase Agreement.
     ----------------------------------------

     (a)  Assignee for itself and each of the members of the syndicate (if
applicable) hereby agrees, expressly for the benefit of Manufacturer, that,
notwithstanding anything contained in the Collateral Assignment to the contrary
(and without in any way releasing Midway from any of its duties or obligations
under the Purchase Agreement), insofar as the provisions of the Purchase
Agreement relate to the Aircraft, in exercising any rights under the Purchase
Agreement, or in making any claim with respect to the Aircraft or other things
(including, without limitation, data, documents, training and services)
delivered or to be delivered pursuant to the Purchase Agreement, the terms and
conditions of the Purchase Agreement, including, without limitation, the
ISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES in
----------------------     ---------------------------------------------
Article 11 of Part 2 of Exhibit C to the AGTA which was incorporated by
reference into the Purchase Agreement and the insurance provisions in Article
8.2 of the AGTA which was incorporated by reference into the Purchase Agreement,
shall apply to and be binding upon Assignee to the same extent as if Assignee
had been the original "Customer" thereunder.  Assignee for itself and each of
the members of the syndicate (if applicable) further agrees, expressly for

                                      A-4
<PAGE>

the benefit of Manufacturer, that at any time and from time to time upon the
written request of Manufacturer, it shall promptly and duly execute and deliver
any and all such further assurances, instruments and documents and take all such
further action as Manufacturer may reasonably request in order to obtain the
full benefits of its agreements set forth in this paragraph.

     (b)  Except as otherwise expressly provided in this Consent, the execution
and delivery by Manufacturer of this Consent and the performance by Manufacturer
of its obligations hereunder shall not be regarded as having created or imposed
upon Manufacturer any increased or additional obligations or undertakings or any
increased or additional limitations to the rights and duties on its part than
are contained in the Purchase Agreement as a result of entering into this
Consent. Manufacturer shall not be required to divest itself of title to or
possession of the Aircraft or any other thing to be delivered under the Purchase
Agreement until delivery and transfer thereof and payment therefor, as provided
in the Purchase Agreement, or to take any action with respect to the Purchase
Agreement or the Aircraft in any manner inconsistent with applicable law
(including, without limitation, any bankruptcy or other court order, ruling or
finding).

8.   Application of Deposits and Advance Payments.
     --------------------------------------------

     The parties hereto acknowledge and agree that in the event Assignee
exercises its rights under the Collateral Assignment and purchases one or more
of the Aircraft, the deposits and advance payments made under the Purchase
Agreement with respect to the Aircraft shall be applied toward the purchase
price of such Aircraft.

9.   Indemnification of Manufacturer by the Assignee and the Members of the
     ----------------------------------------------------------------------
Syndicate (if applicable).
-------------------------

     Assignee agrees to indemnify, defend and hold harmless Manufacturer, its
successors and assigns, and their respective officers, directors and employees
(collectively, the "Indemnitees" and each an "Indemnitee") from and against any
and all claims, losses obligations, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements and liabilities of any kind whatsoever
(including the reasonable fees and disbursements of counsel for such
Indemnitees) which may be imposed on, incurred by, or asserted against such
Indemnitees in any manner resulting from or arising out of the exercise by
Assignee of its rights or remedies under the Collateral Assignment or this
Consent and Agreement, if and only if it is determined by the final judgment of
a court of competent jurisdiction that Assignee was not entitled to exercise
such rights or remedies or that such rights or remedies were exercised contrary
to the provisions of this Consent, the Collateral Assignment or applicable law.
Notwithstanding the previous sentence, Assignee will not indemnify any
Indemnitee who has been determined by the final judgment of a court of competent
jurisdiction to have acted with gross negligence with regard to the matter for
which indemnification is sought. If any Indemnitee hereunder has knowledge of
any liability hereby indemnified against, it shall give prompt written notice
thereof to Assignee. Assignee shall have the right to

                                      A-5
<PAGE>

investigate, defend or compromise any claim for which indemnification is sought
and each Indemnitee hereunder shall cooperate with the reasonable requests of
Assignee with respect thereto.

10.  Manufacturer's Representations and Warranties.
     ---------------------------------------------

     Manufacturer hereby represents and warrants to Midway and Assignee that:

     (a)  Manufacturer is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and is duly qualified
to do business as a foreign corporation in the State of Washington.

     (b)  Manufacturer has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Consent and Agreement
and the execution, delivery and performance of this Consent and Agreement have
been duly authorized by all necessary corporate action on the part of
Manufacturer.

     (c)  Each of the Purchase Agreement and this Consent and Agreement has been
duly executed and delivered by Manufacturer and constitutes the legally valid
and binding obligation of Manufacturer, enforceable against Manufacturer in
accordance with its terms except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and general principles of equity
(regardless of whether such enforceability is at issue in the proceeding in
equity or at law).

     (d)  Set forth on Schedule I hereto, with respect to each Aircraft, is (1)
the current Scheduled Delivery Date of such Aircraft, (2) the aggregate amount
of Deposit Payments received by the Manufacturer prior to the date hereof with
respect to such Aircraft, (3) the remaining scheduled dates and amounts of
Deposit Payments with respect to such Aircraft due after the date hereof and (4)
the estimated purchase price as of the currently Scheduled Delivery Date for
such Aircraft.

11.  Manufacturer's Covenants:
     ------------------------

     Manufacturer hereby covenants to Midway and Assignee that:

     (a)  Manufacturer will remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under the Purchase
Agreement in accordance with the terms and conditions thereof and, subject to
the terms of the Purchase Agreement and the Collateral Assignment, all of
Manufacturer's obligations under the Purchase Agreement will inure to the
benefit of Assignee as though Assignee were named "Customer" thereunder; and

     (b)  Manufacturer will not assert any lien or claim against any Aircraft
after payment in full for that Aircraft under and in accordance with the
Purchase Agreement.

                                      A-6
<PAGE>

12.  GOVERNING LAW
     -------------

     THIS CONSENT WILL BE INTERPRETED UNDER AND GOVERNED BY THE LAWS OF THE
STATE OF WASHINGTON, U.S.A., EXCEPT THAT WASHINGTON'S CHOICE OF LAW RULES SHALL
NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE LAW OF ANOTHER JURISDICTION.

13.  Counterparts.
     ------------

     This Consent may be executed by the parties 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.

                                      A-7
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Consent to be
executed by their respective officers or agents as of the date first above
written.


MIDWAY:                  MIDWAY AIRLINES CORPORATION


                         By:  ______________________
                         Its: ______________________


ASSIGNEE:                GENERAL ELECTRIC CAPITAL
                          CORPORATION
                         On behalf of itself and the members of the syndicate
                         (if applicable),


                         By:  ______________________
                         Its: ______________________


MANUFACTURER:            THE BOEING COMPANY


                         By: _______________________
                         Its:_______________________


                                      A-8

<PAGE>

                                   SCHEDULE 1
                                   ----------
                          Midway Airlines Corporation
     Aircraft Delivery Dates, Price Escalation and Maximum Aircraft Amount

[*] Confidential treatment requested for omitted information. Omitted
    information has been filed separately with the Commission.