FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934.

       For the quarterly period ended June 30, 2001
                                      -------------

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

       For the transition period from ___________________to____________________

       Commission file number            1-13934
                                         -------

                         MIDWEST EXPRESS HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

                  Wisconsin                              39-1828757
                  ---------                               ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


                            6744 South Howell Avenue
                           Oak Creek, Wisconsin 53154
                           --------------------------
                    (Address of principal executive offices)
                                   (Zip code)


                                  414-570-4000
                                  ------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                            Yes      X          No
                                  --------           --------

As of July 31, 2001, there were 13,830,529 shares of Common Stock, $.01 par
value, of the Registrant outstanding.

<PAGE>

                         MIDWEST EXPRESS HOLDINGS, INC.

                                    FORM 10-Q

                       For the period ended June 30, 2001

                                      INDEX

                         PART I - FINANCIAL INFORMATION

                                                                        Page No.

Item 1.   Financial Statements (unaudited)

          Condensed Consolidated Statements of Operations                   3

          Condensed Consolidated Balance Sheets                             4

          Condensed Consolidated Statements of Cash Flows                   5

          Unaudited Notes to Condensed Consolidated Financial Statements    6

Item 2.   Management's Discussion and Analysis of Results of
          Operations and Financial Condition                                9

Item 3.   Quantitative and Qualitative Disclosures about Market Risk       20


                           PART II - OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders              21




Item 6.   Exhibits and Reports on Form 8-K                                 21

   SIGNATURES                                                              22


                                       2
<PAGE>
Part I Item I - Financial Statements

<TABLE>
                                   MIDWEST EXPRESS HOLDINGS, INC.
                           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                          (Dollars in thousands, except per share amounts)
                                             (Unaudited)
<CAPTION>
                                                                     Three Months Ended              Six Months Ended
                                                                          June 30,                       June 30,
                                                                    2001           2000            2001            2000
<S>                                                            <C>             <C>             <C>             <C>
Operating revenues:
      Passenger service ....................................   $    124,170    $    116,082    $    231,970    $    212,246
      Cargo ................................................          2,590           2,602           5,436           5,499
      Other ................................................          8,739           7,134          17,022          14,837
                                                               ------------    ------------    ------------    ------------
           Total operating revenues ........................        135,499         125,818         254,428         232,582
                                                               ------------    ------------    ------------    ------------

Operating expenses:
      Salaries, wages and benefits .........................         43,589          36,719          85,902          72,295
      Aircraft fuel and oil ................................         24,439          20,855          48,820          40,861
      Commissions ..........................................          7,140           6,588          13,374          12,409
      Dining services ......................................          7,651           6,430          13,814          11,896
      Station rental, landing and other fees ...............          8,983           8,238          19,471          17,009
      Aircraft maintenance materials and repairs ...........         13,704          14,534          29,447          26,512
      Depreciation and amortization ........................          5,281           4,088          10,232           8,001
      Aircraft rentals .....................................          6,025           6,049          12,065          12,243
      Impairment loss ......................................          8,839            --             8,839            --
      Other ................................................         14,568           8,912          27,366          20,578
                                                               ------------    ------------    ------------    ------------
           Total operating expenses ........................        140,219         112,413         269,330         221,804
                                                               ------------    ------------    ------------    ------------
Operating (loss) income ....................................         (4,720)         13,405         (14,902)         10,778
                                                               ------------    ------------    ------------    ------------
Other (expense) income:
      Interest income ......................................            247             742             475             966
      Interest expense .....................................           (605)            (65)         (1,051)           (131)
      Other ................................................            (11)            (57)            (22)            (75)
                                                               ------------    ------------    ------------    ------------
           Total other (expense) income ....................           (369)            620            (598)            760
                                                               ------------    ------------    ------------    ------------

(Loss) Income before income tax (credit) provision and
   cumulative effect of accounting changes .................         (5,089)         14,025         (15,500)         11,538
(Credit) Provision for income taxes ........................         (1,883)          5,185          (5,735)          4,261
                                                               ------------    ------------    ------------    ------------
(Loss) Income before cumulative effect of accounting changes         (3,206)          8,840          (9,765)          7,277
Cumulative effect of accounting changes, net of applicable
   income taxes of $2,768 ..................................           --              --              --            (4,713)
                                                               ------------    ------------    ------------    ------------
Net (Loss) Income ..........................................   $     (3,206)   $      8,840    $     (9,765)   $      2,564
                                                               ============    ============    ============    ============

(Loss) Income per common share - basic:
      (Loss) Income before cumulative effect of accounting
         changes ...........................................   $      (0.23)   $       0.63    $      (0.71)   $       0.52
      Cumulative effect of accounting changes, net .........           --              --              --             (0.34)
                                                               ------------    ------------    ------------    ------------
      Net (Loss) Income ....................................   $      (0.23)   $       0.63    $      (0.71)   $       0.18
                                                               ============    ============    ============    ============

(Loss) Income per common share - diluted:
    (Loss) Income before cumulative effect
      of accounting changes ................................   $      (0.23)   $       0.63    $      (0.71)   $       0.51
      Cumulative effect of accounting changes, net .........           --              --              --             (0.33)
                                                               ------------    ------------    ------------    ------------
      Net (Loss) Income ....................................   $      (0.23)   $       0.63    $      (0.71)   $       0.18
                                                               ============    ============    ============    ============

      Weighted average shares  - basic .....................     13,829,402      13,979,781      13,826,249      13,998,587
      Weighted average shares  - diluted ...................     13,829,402      14,116,336      13,826,249      14,140,544
</TABLE>

                   See notes to condensed consolidated financial statements.

                                       3
<PAGE>
Part I Item I - Financial Statements

<TABLE>
                                   MIDWEST EXPRESS HOLDINGS, INC.
                                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Dollars in thousands, except per share amount)
                                           (Unaudited)
<CAPTION>
                                                                               June 30,  December 31,
                                                                                 2001        2000
                                                                                 ----        ----
                                     ASSETS
Current assets:
<S>                                                                           <C>          <C>
      Cash and cash equivalents ...........................................   $  17,011    $  15,703
      Accounts receivable:
           Less allowance for doubtful accounts of $311 and
             $226 at June 30, 2001 and
             December 31, 2000, respectively ..............................       7,887        8,152
         Income tax refund ................................................       3,568        6,753
         Other receivables ................................................       4,857          945
                                                                              ---------    ---------
         Total receivables ................................................      16,312       15,850
        Inventories .......................................................       7,781        7,988
      Prepaid expenses
        Commissions .......................................................       2,635        2,491
        Other .............................................................       3,147        2,606
                                                                              ---------    ---------
           Total prepaid expenses .........................................       5,782        5,097
      Deferred income taxes ...............................................       8,409        9,351
                                                                              ---------    ---------
                Total current assets ......................................      55,295       53,989
                                                                              ---------    ---------
Property and equipment, at cost ...........................................     393,117      350,083
      Less accumulated depreciation .......................................     119,318      107,208
                                                                              ---------    ---------
      Net property and equipment ..........................................     273,799      242,875
Landing slots and leasehold rights, net ...................................       3,681        3,872
Purchase deposits on flight equipment .....................................       3,500        1,900
Other assets ..............................................................       2,945        3,361
Total assets ..............................................................   $ 339,220    $ 305,997
                                                                              =========    =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
      Accounts payable ....................................................   $   6,550    $   6,216
      Notes payable .......................................................      20,000       20,000
      Aircraft traffic liability ..........................................      61,790       54,440

      Accrued liabilities:
          Vacation pay ....................................................       6,123        5,718
          Scheduled maintenance expense ...................................       5,692        6,914
          Frequent Flyer awards ...........................................       2,402        2,281
          Other ...........................................................      24,021       27,374
        Current maturities of long-term debt ..............................       1,924          182
                                                                              ---------    ---------
      Total current liabilities ...........................................     128,502      123,125
                                                                              ---------    ---------
Long-term debt ............................................................      36,120        2,886
Deferred income taxes .....................................................      21,888       21,694
Noncurrent scheduled maintenance expense ..................................       8,685        7,566
Accrued pension and other postretirement benefits .........................       9,311        7,909
Deferred Frequent Flyer partner revenue ...................................       7,851        7,517
Other noncurrent liabilities ..............................................       6,987        6,024
                                                                              ---------    ---------
Total liabilities .........................................................     219,344      176,721
                                                                              ---------    ---------
Shareholders' equity:
      Preferred stock, without par value, 5,000,000 authorized,
        no shares issued and outstanding ..................................        --           --
      Common stock, $.01 par value, 25,000,000 shares authorized,
        14,549,531 shares issued ..........................................         145          145
      Additional paid-in capital ..........................................      11,701       11,609
      Treasury stock, at cost .............................................     (15,718)     (15,991)
      Retained earnings ...................................................     123,748      133,513
                                                                              ---------    ---------
Total shareholders' equity ................................................     119,876      129,276
                                                                              ---------    ---------
Total liabilities and shareholders' equity ................................   $ 339,220    $ 305,997
                                                                              =========    =========
</TABLE>

           See notes to condensed consolidated financial statements.

                                       4
<PAGE>
Part I Item I - Financial Statements

                         MIDWEST EXPRESS HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)

                                                            Six Months Ended
                                                                 June 30,
                                                            2001          2000
                                                            ----          ----
Operating activities:
      Net (Loss) Income ...............................   $ (9,765)   $  2,564
      Items not involving the use of cash:
           Depreciation and amortization ..............     10,232       8,001
           Impairment loss ............................      8,839        --
           Deferred income taxes ......................      1,136      (3,746)
           Cumulative effect of accounting changes, net       --         4,713
           Other ......................................      2,447       2,456

      Changes in operating assets and liabilities:
           Accounts receivable ........................       (462)        (81)
           Inventories ................................        207        (276)
           Prepaid expenses ...........................       (685)       (230)
           Accounts payable ...........................        334       2,067
           Deferred Frequent Flyer partner revenue ....        334         571
           Accrued liabilities ........................     (2,930)      5,331
           Air traffic liability ......................      7,350      11,849
                                                          --------    --------

Net cash provided by operating activities .............     17,037      33,219
                                                          --------    --------
Investing activities:
      Capital expenditures ............................    (51,993)    (21,499)
      Purchase deposits on flight equipment ...........     (1,600)       (800)
      Other ...........................................        158        (347)
                                                          --------    --------
Net cash used in investing activities .................    (53,435)    (22,646)
                                                          --------    --------

Financing activities:

      Proceeds from aircraft financing ................     35,080        --

      Other ...........................................      2,626        (699)
                                                          --------    --------

Net cash provided by (used in) financing activities ...     37,706        (699)
                                                          --------    --------
Net increase in cash and cash equivalents .............      1,308       9,874
Cash and cash equivalents, beginning of period ........     15,703      16,049
                                                          --------    --------
Cash and cash equivalents, end of period ..............   $ 17,011    $ 25,923
                                                          ========    ========

     See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                         Midwest Express Holdings, Inc.
         Unaudited Notes to Condensed Consolidated Financial Statements

1.    Business and Basis of Presentation

      The condensed consolidated financial statements for the three and six
      month periods ended June 30, 2001 and 2000 are unaudited and reflect all
      adjustments (consisting only of normal recurring adjustments) that are, in
      the opinion of management, necessary for a fair presentation of the
      financial position and operating results for the interim period. The
      condensed consolidated financial statements should be read in conjunction
      with the notes thereto, together with Management's Discussion and Analysis
      of Financial Condition and Results of Operations, contained in the Midwest
      Express Holdings, Inc. (the "Company") Annual Report to Shareholders and
      incorporated by reference in the Company's Annual Report on Form 10-K for
      the year ended December 31, 2000. The results of operations for the three
      and six month periods ended June 30, 2001 are not necessarily indicative
      of the results for the entire fiscal year ending December 31, 2001.

2.    Cumulative Effect of Accounting Changes

      Effective January 1, 2000, the Company adopted Staff Accounting Bulletin
      101, "Revenue Recognition in Financial Statements" ("SAB 101"), issued by
      the Securities and Exchange Commission in December 1999. SAB 101 provides
      guidance on the application of accounting principles generally accepted in
      the United States of America to revenue recognition in financial
      statements. Prior to the issuance of SAB 101, the Company recognized all
      revenue from Frequent Flyer miles sold to partners, net of the incremental
      cost of providing future air travel, when the mileage was sold, which was
      consistent with most major airlines. Beginning January 1, 2000, as a
      result of adopting SAB 101, the Company changed its method used to account
      for the sale of Frequent Flyer mileage credits to participating partners
      such as credit card companies, hotels and car rental agencies. Under the
      new accounting method, a portion of the revenue from the sale of Frequent
      Flyer mileage credits is deferred and recognized when transportation is
      provided to the passenger. In the first quarter 2000, the Company recorded
      an unfavorable adjustment of $7.8 million, net of tax, for the cumulative
      effect of the change for prior years. The Company believes the new method
      appropriately matches revenues with services in the period in which
      services are actually provided.

      The Company also changed its accounting policy associated with major
      maintenance on airframes. In the past, major airframe maintenance costs
      were either (1) accrued to expense on the basis of estimated future costs
      and estimated flight hours between major maintenance events, or (2)
      capitalized when incurred and amortized on the basis of estimated flight
      hours until the next major maintenance event. Effective January 1, 2000,
      in conjunction with the Company's efforts to divide major airframe
      maintenance events into smaller, more frequent events, the Company records
      airframe maintenance costs as they are incurred. Costs associated with
      major maintenance on aircraft engines continue to use the existing
      approach. In the first quarter 2000, the Company recorded a favorable

                                       6
<PAGE>

      adjustment of $3.1 million, net of tax, for the cumulative effect of the
      change for prior years.

3.    New Accounting Standard

      The Company adopted Statement of Financial Accounting Standards ("SFAS"),
      No. 133, "Accounting for Derivative Instruments and Hedging Activities"
      and the corresponding amendments under SFAS No. 138, "Accounting for
      Certain Derivative Instruments and Certain Hedging Activities" on January
      1, 2001. As of June 30, 2001, the Company had no derivative instruments.

4.    Impairment Charge

      During the second quarter 2001, the Company decided to accelerate the
      retirement of eight DC-9-10 aircraft to begin in 2003 in the Midwest
      Express segment. In connection with this decision, the Company performed
      evaluations to determine, in accordance with SFAS No. 121, "Accounting for
      the Impairment of Long-Lived Assets and for Long-Lived Assets to be
      Disposed Of," whether future cash flows (undiscounted and without interest
      charges) expected to result from the use and eventual disposition of these
      aircraft would be less than the aggregate carrying amounts. As a result of
      the evaluation, the Company determined that the estimated future cash flow
      would be less than their carrying amount resulting in an impairment as
      defined by SFAS No. 121. Consequently, the original cost basis of these
      assets were reduced to reflect the fair market value at the date of the
      decision, resulting in an $8.8 million (pre-tax) impairment loss. In
      determining the fair market value of these assets, the Company considered
      market trends in aircraft dispositions, data from third parties and
      management estimates.

5.    Restructuring Charge

      During second quarter 2001, the Company recorded charges of $1.1 million
      related to a workforce reduction program. Approximately 250 full-time
      equivalent positions were eliminated throughout the Company. The $1.1
      million charges include salaries, wages and benefits, legal, severance
      costs and outplacement services. Approximately $.7 million remains accrued
      at June 30, 2001.

6.    Segment Reporting

      Midwest Express Airlines, Inc. ("Midwest Express") and Astral Aviation,
      Inc., doing business as Skyway Airlines, The Midwest Express Connection
      ("Astral"), constitute the reportable segments of the Company. The
      Company's reportable segments are strategic units that are managed
      independently because they provide different services with different cost
      structures and marketing strategies. Additional detail on segment
      reporting is included in the Company's Annual Report on Form 10-K for the
      fiscal year ended December 31, 2000. Financial information for the three
      months and six months ended June 30 on the two operating segments, Midwest
      Express and Astral, follows (in thousands):


                                       7
<PAGE>

<TABLE>
                            Three Months Ended June 30, 2001
<CAPTION>
2001                                  Midwest Express        Astral        Elimination      Consolidation
----                                  ---------------        ------        -----------      -------------
<S>                                        <C>              <C>              <C>              <C>
Operating revenues .................       $ 117,226        $  19,821        $  (1,548)       $ 135,499
Operating (loss) income ............          (5,178)             458             --             (4,720)
Depreciation and income amortization           4,592              689             --              5,281
Interest income ....................             474             --               (227)             247
Interest expense ...................            (605)            (227)             227             (605)
(Loss) income before income tax
    (credit) provision .............          (5,320)             231             --             (5,089)
(Credit) provision for income taxes           (1,969)              86             --             (1,883)
Total assets .......................         317,968           53,820          (32,568)         339,220
Capital expenditures ...............       $  14,282        $  10,430        $    --          $  24,712

<CAPTION>
                            Three Months Ended June 30, 2000

2000                                  Midwest Express        Astral        Elimination      Consolidation
----                                  ---------------        ------        -----------      -------------
<S>                                        <C>              <C>              <C>              <C>
Operating revenues .................       $ 111,107        $  15,830        $  (1,119)       $ 125,818
Operating income ...................          12,913              492             --             13,405
Depreciation and amortization ......           3,757              331             --              4,088
Interest income ....................             742              172             (172)             742
Interest expense ...................            (237)            --                172              (65)
Income before income taxes .........          13,361              664             --             14,025
Provision for income taxes .........           4,940              245             --              5,185
Total assets .......................         272,174           26,021          (11,136)         287,059
Capital expenditures ...............       $  11,768        $     588        $    --          $  12,356

<CAPTION>
                            Six Months Ended June 30, 2001

2001                                  Midwest Express        Astral        Elimination      Consolidation
----                                  ---------------        ------        -----------      -------------
<S>                                        <C>              <C>              <C>              <C>
Operating revenues .................       $ 221,481        $  35,733        $  (2,786)       $ 254,428
Operating (loss) ...................         (13,258)          (1,644)            --            (14,902)
Depreciation and amortization ......           9,035            1,197             --             10,232
Interest income ....................             824             --               (349)             475
Interest expense ...................          (1,051)            (349)             349           (1,051)
(Loss) before income tax credit ....         (13,507)          (1,993)            --            (15,500)
Income tax credit ..................          (4,998)            (737)            --             (5,735)
Total assets .......................         317,968           53,820          (32,568)         339,220
Capital expenditures ...............       $  30,159        $  21,834        $    --          $  51,993

<CAPTION>
                            Six Months Ended June 30, 2000

2000                                  Midwest Express        Astral        Elimination      Consolidation
----                                  ---------------        ------        -----------      -------------
<S>                                        <C>              <C>              <C>              <C>
Operating revenues .................       $ 205,618        $  28,974        $  (2,010)       $ 232,582
Operating income (loss) ............          12,099           (1,321)            --             10,778
Depreciation and amortization ......           7,350              651             --              8,001
Interest income ....................             966              318             (318)             966
Interest expense ...................            (449)            --                318             (131)
Income (loss) before income tax
   provision (credit) and cumulative
   effect of accounting changes ....          12,540           (1,002)            --             11,538
Provision (credit) for income taxes            4,637             (376)            --              4,261
Cumulative effect of accounting
   changes, net ....................          (4,713)            --               --             (4,713)
Total assets .......................         272,174           26,021          (11,136)         287,059
Capital expenditures ...............       $  20,221        $   1,278        $    --          $  21,499
</TABLE>


                                       8
<PAGE>

Part I Item 2.

          Management's Discussion and Analysis of Results of Operations
                             and Financial Condition

                              Results of Operations
Overview
The Company's 2001 second quarter operating loss was $(4.7) million, a decrease
of $18.1 million from the second quarter 2000 operating income of $13.4 million.
Net loss for the quarter was $(3.2) million, which was a $12.0 million decrease
from second quarter 2000 net income of $8.8 million. For the first six months of
2001, operating loss was $(14.9) million, a decrease of $25.7 million from 2000
operating income of $10.8 million. Year-to-date net income decreased from $2.6
million in 2000 to a net loss of $(9.8) million in 2001. Year-to-date diluted
loss per share in 2001 was $(.71), an $.89 decrease versus 2000 net income per
diluted share of $.18.

The Company's total revenue in the second quarter 2001 increased $9.7 million,
or 7.7%, from second quarter 2000 to $135.5 million. The increase in revenue was
substantially attributable to a 12.7% increase in passenger volume, as measured
by scheduled service revenue passenger miles ("RPMs"), offset by a 5.1% decrease
in revenue yield.

Capacity, as measured by scheduled service available seat miles ("ASMs"),
increased 12.5% in second quarter 2001. Second quarter 2001 capacity at Midwest
Express increased 10.7% due to the addition of three MD-80 aircraft in scheduled
service and increased 35.0% at Astral due to the addition of three regional
jets. Second quarter 2001 traffic, as measured by revenue passenger miles,
increased 10.7% at Midwest Express and increased 49.0% at Astral.

The Company's operating costs increased by $27.8 million, or 24.7%, in the
second quarter 2001 to $140.2 million. Second quarter 2001 operating expenses
included an $8.8 million impairment charge associated with eight owned DC-9-10
aircraft that the Company intends to retire beginning in 2003, earlier than
originally planned; restructuring charges of $1.1 million (pre-tax) related to a
workforce reduction; and contract termination fees of $0.6 million (pre-tax) due
to the cancellation of a purchase contract for one MD-80 aircraft. Midwest
Express costs also increased due to the addition of three MD-80 aircraft and
Astral costs increased due to the addition of three regional jets. The operating
costs increase was also the result of higher labor costs, increased fuel costs,
depreciation and amortization and increased dining services costs. On a cost per
ASM basis, costs increased 12.6% at Midwest Express and decreased 6.5% at
Astral. Additional detail on cost changes is included in subsequent sections.


                                       9
<PAGE>

Operating Statistics
The following table provides selected operating statistics for Midwest Express
and Astral.

<TABLE>
<CAPTION>
                                                                 Three Months Ended                   Six Months Ended
                                                                      June 30,                             June 30,
                                                           ------------------------------       ----------------------------
                                                               2001               2000              2001             2000
                                                               ----               ----              ----             ----
Midwest Express Operations
<S>                                                           <C>                <C>              <C>               <C>
Origin & Destination Passengers                               598,850            538,535          1,094,754         999,201
Revenue Passenger Miles (000s)                                571,523            516,489          1,054,574         964,283
Scheduled Service Available Seat Miles (000s)                 861,293            778,172          1,695,724       1,529,439
Total Available Seat Miles (000s)                             869,807            785,744          1,713,124       1,546,568
Load Factor (%)                                                  66.4%              66.4%              62.2%           63.0%
Revenue Yield                                                  $0.183             $0.194             $0.186          $0.190
Revenue per Scheduled Service ASMs (1)                         $0.126             $0.134             $0.121          $0.125
Cost per Total ASM (2)                                         $0.131             $0.125             $0.132          $0.125
Average Passenger Trip Length (miles)                           954.4              959.1              963.3           965.1
Number of Flights                                              12,524             11,214             24,828          22,007
Into-plane Fuel Cost per Gallon                                $0.938             $0.894             $0.963          $0.897
Full-time equivalent Employees at End of Period                 2,752              2,664              2,752           2,664
Aircraft in Service at End of Period                               35                 32                 35              32

Astral Operations

Origin & Destination Passengers                               147,234            116,159            265,602         213,203
Revenue Passenger Miles (000s)                                 43,909             29,467             74,754          53,228
Scheduled Service Available Seat Miles (000s)                  84,522             62,606            157,437         119,122
Total Available Seat Miles (000s)                              84,528             62,606            157,452         119,147
Load Factor (%)                                                  51.9%              47.1%              47.5%           44.7%
Revenue Yield                                                  $0.450             $0.535             $0.476          $0.542
Revenue per Scheduled Service ASMs (1)                         $0.234             $0.253             $0.227          $0.243
Cost per Total ASM                                             $0.229             $0.245             $0.237          $0.254
Average Passenger Trip Length (miles)                           298.2              253.7              281.4           249.7
Number of Flights                                              14,189             13,067             27,732          25,088
Into-plane Fuel Cost per Gallon                                $1.023             $0.975             $1.038          $0.988
 Full-time equivalent Employees at End of Period                  576                462                576             462
Aircraft in Service at End of Period                               23                 20                 23              20

    (1)  Passenger, cargo and other transport-related revenue divided by scheduled service ASMs.
    (2)  Excluding impairment loss.

      Note: All statistics exclude charter operations except the following:
      total ASMs, cost per total ASM, into-plane fuel cost, number of employees
      and aircraft in service. Aircraft acquired but not yet placed into service
      are excluded from the aircraft in service statistic. Numbers in this table
      may not be recomputed due to rounding.
</TABLE>


                                       10
<PAGE>


The following table provides operating revenues and expenses for the Company
expressed as cents per total ASM, including charter operations, and as a
percentage of total revenues:

<TABLE>
<CAPTION>
                                                Three Months Ended June 30,                    Six Months Ended June 30,
                                                ---------------------------                    -------------------------
                                                2001                  2000                    2001                   2000
                                                ----                  ----                    ----                   ----
                                       Per Total     % of     Per Total    % of      Per Total     % of      Per Total    % of
                                          ASM       Revenue      ASM      Revenue       ASM       Revenue      ASM       Revenue
                                       ---------    ------    ---------   -------    ---------    -------    ---------   -------
<S>                                      <C>         <C>        <C>         <C>        <C>          <C>       <C>         <C>
Operating revenues:
Passenger service                        $0.130      91.6%      $0.137      92.2%      $0.124       91.2%     $0.128      91.2%
Cargo                                     0.003       1.9%       0.003       2.1%       0.003        2.1%      0.003       2.4%
Other                                     0.009       6.5%       0.008       5.7%       0.009        6.7%      0.009       6.4%
                                          -----       ----       -----       ----       -----        ----      -----       ----
Total operating revenues                 $0.142     100.0%      $0.148     100.0%      $0.136      100.0%     $0.140     100.0%

Operating expenses:
Salaries, wages and benefits             $0.046      32.2%      $0.043      29.2%      $0.046       33.8%     $0.043      31.1%
Aircraft fuel and oil                     0.026      18.0%       0.025      16.7%       0.026       19.2%      0.025      17.7%
Commissions                               0.007       5.3%       0.008       5.2%       0.007        5.3%      0.008       5.3%
Dining services                           0.008       5.7%       0.008       5.1%       0.007        5.4%      0.007       5.1%
Station rental, landing and other fees    0.009       6.6%       0.010       6.5%       0.010        7.6%      0.010       7.3%
Aircraft maintenance materials/repairs    0.014      10.1%       0.017      11.5%       0.016       11.6%      0.016      11.4%
Depreciation and amortization             0.006       3.9%       0.005       3.2%       0.005        4.0%      0.005       3.4%
Aircraft rentals                          0.006       4.4%       0.007       4.8%       0.006        4.7%      0.007       5.3%
Impairment loss                           0.009       6.5%           -         -        0.005        3.5%          -         -
Other                                     0.015      10.8%       0.010       7.1%       0.015       10.8%      0.012       8.8%
                                          -----      -----       -----       ----       -----       -----      -----       ----
Total operating expenses                 $0.147     103.5%      $0.133      89.3%      $0.144      105.9%     $0.133      95.4%
                                         ======     ======      ======      =====      ======      ======     ======      =====

Total ASMs (000s)                       954,335                848,350              1,870,575              1,665,715


           Note: Numbers, percents and totals in this table may not be recomputed due to rounding.
</TABLE>

                 Three Months Ended June 30, 2001 Compared with
                        Three Months Ended June 30, 2000

Operating Revenues
Company operating revenues totaled $135.5 million in the second quarter 2001, a
$9.7 million, or 7.7%, increase over second quarter 2000. Passenger revenues
accounted for 91.6% of total revenues and increased $8.1 million, or 7.0%, from
second quarter 2000 to $124.2 million in second quarter 2001. The increase is
attributable to a 12.7% increase in passenger volume, as measured by revenue
passenger miles, offset by a 5.1% decrease in revenue yield.

Midwest Express passenger revenue increased $4.1 million, or 4.1%, from second
quarter 2000 to $104.4 million in second quarter 2001. This increase was
primarily due to an 11.2% increase in origin and destination passengers. Total
capacity, as measured by scheduled service ASMs, increased 10.7% due to three
additional aircraft in scheduled service since second quarter 2000. Revenue
yield decreased 6.0% due to decreased business travel as a result of the soft
economy, increased competition in some markets and lower-yield capacity
additions in existing markets. Load factor remained stable at 66.4%.

Astral passenger revenue increased $4.0 million, or 25.4%, from second quarter
2000 to $19.8 million in second quarter 2001. Total capacity increased 35.0% due
to the addition of three new regional jets in scheduled service during second
quarter 2001. Traffic, as measured by revenue passenger miles, increased 49.0%.
Load factor increased from 47.1% in second quarter 2000 to 51.9% in second
quarter 2001. Part of the increase in load factor resulted from passengers that
traveled on Astral during the Comair pilots' strike. Revenue yield decreased
15.8%, from $0.53 in second quarter 2000 to $0.45 in second quarter 2001 due to
decreased business travel and an 18% increase in average trip length with
lower-than-average yields.

                                       11
<PAGE>

Revenue from cargo, charter and other services increased $1.6 million in second
quarter 2001. Midwest Express benefited from increased revenue from Frequent
Flyer partnership programs of $0.7 million and $0.5 million from ticket exchange
fees in second quarter 2001.

Operating Expenses
Second quarter 2001 operating expenses increased $27.8 million, or 24.7%, from
second quarter 2000. Part of the increase is due to an $8.8 million impairment
charge associated with eight owned DC-9-10 aircraft. The Company intends to
retire the aircraft beginning in 2003, earlier than originally planned. The
increase was also the result of higher labor costs, increased fuel costs,
depreciation and amortization, and increased dining service costs. Cost per ASM
at Midwest Express increased 12.6% in the second quarter 2001. Cost per total
ASM, excluding the aircraft impairment charge, restructuring charges related to
a workforce reduction, contract termination fees due to the cancellation of a
purchase contract for one MD-80, and a sales tax credit in 2000, was unchanged
year over year. Astral had cost increases in second quarter 2001 in most
categories due to the addition of three regional jets in scheduled service. The
Company's cost per total ASM increased 10.9%, from 13.3(cent) in 2000 to
14.7(cent) in 2001.

Salaries, wages and benefits increased $6.9 million, or 18.7%, from second
quarter 2000 to $43.6 million in second quarter 2001. The increase included
restructuring charges of $0.5 million (pre-tax) related to a workforce reduction
program that eliminated approximately 250 full-time equivalent positions
throughout the Company and resulted in additional costs for severance pay.
Increased labor costs were also the result of an increase in pay scales for most
customer service and maintenance employees at Midwest Express as well as other
salary increases throughout the Company. These rate adjustments were implemented
based on industry salary surveys and management's desire to increase pay scales
to maintain a competitive position in the industry.

Aircraft fuel and oil and associated taxes increased $3.6 million, or 17.2%, in
second quarter 2001. Into-plane fuel increased 5.1%, averaging 94.7(cent) per
gallon in second quarter 2001 versus 90.1(cent) per gallon in second quarter
2000, resulting in a $1.2 million pre-tax price impact. Fuel consumption
increased 11.7% in the quarter due to increased flight operations. The Company
has not hedged prices for future fuel requirements. Fuel costs in July 2001
trended downward, averaging 88.7(cent) per gallon.

Commissions increased $0.6 million in second quarter 2001, or 8.4%, from second
quarter 2000 to $7.1 million. This category includes travel agent commissions
and credit card commissions. The increase was primarily due to a 7.0% increase
in passenger revenue, offset by savings realized because of increased travel
booked directly through the Company's reservations centers and Web site, other
travel-related Web sites, and ticket counters.

Dining service costs increased $1.2 million in second quarter 2001, or 19.0%,
from second quarter 2000 to $7.7 million. The increase was primarily due to an
11.2% increase in origin and destination passengers at Midwest Express and a
5.2% increase in food and services prices. Total dining service costs per
Midwest Express passenger (including food, beverage, linen,



                                       12
<PAGE>

catering equipment and supplies) increased from $11.85 in second quarter 2000 to
$12.47 for second quarter 2001.

Station rental, landing and other fees increased $0.7 million in second quarter
2001, or 9.0%, from second quarter 2000 to $9.0 million. Midwest Express
operated 11.7% more flight segments and Astral operated 8.6% more flight
segments causing the increase. On a cost per total ASM basis, these costs
decreased 3.1%.

Maintenance costs decreased by $0.8 million in second quarter 2001, or 5.7%,
from second quarter 2000 to $13.7 million. Aircraft maintenance costs decreased
16.2% on a cost per total ASM basis. This decrease was due to fewer unscheduled
engine repairs and a reduction of 17 contract mechanics from second quarter
2000. During second quarter 2001, Midwest Express entered into a fixed cost per
hour agreement for maintenance of the MD-80 aircraft engines. This contract will
provide long term stabilization of engine operations costs on the fleet.

Depreciation and amortization increased $1.2 million in second quarter 2001, or
29.2%, from second quarter 2000 to $5.3 million. The increase was primarily the
result of depreciation associated with three additional MD-80 aircraft placed in
service and three regional jets since June 30, 2000.

Aircraft rental costs were $6.0 million for both second quarter 2000 and second
quarter 2001. On a cost per total ASM basis, these costs decreased 11.5% as
acquired aircraft were owned rather than leased.

An $8.8 million impairment charge was recorded in second quarter 2001 for eight
company-owned DC-9-10 aircraft. During the second quarter 2001, the Company
decided to accelerate the retirement of these aircraft to begin in 2003. In
connection with this decision, the Company performed an evaluation, in
accordance with SFAS No. 121, to determine whether future cash flows
(undiscounted and without interest charges) expected to result from the use and
eventual disposition of these aircraft would be less than the aggregate carrying
amount of these aircraft. As a result of the evaluation, the Company determined
that the estimated future cash flows expected to be generated by these aircraft
would be less than their carrying amounts, resulting in an impairment, as
defined by SFAS No. 121. The original cost basis of these aircraft were reduced
to reflect the fair market value at the date of the decision, resulting in an
$8.8 million impairment charge. Depreciation on these eight aircraft going
forward will be almost unchanged.

Other operating expenses increased $5.7 million in second quarter 2001, or
63.5%, from second quarter 2000 to $14.6 million. Other operating expenses
consist primarily of advertising and promotion, insurance, legal fees, property
taxes, consulting services, crew hotel rooms, reservation fees, administration,
and other items. The increase was primarily due to the fact that second quarter
2000 expenses included an offset for a nonrecurring $2.7 million favorable
settlement in second quarter 2000 of a sales and use tax dispute on meals
boarded on aircraft in Wisconsin. The increase was also the result of cost
increases in crew hotel rooms, advertising, flight training, charters, $0.6
million contract termination fees due to the cancellation of a


                                       13
<PAGE>

purchase contract for an MD-80 aircraft, and other items. On a cost per total
ASM basis, excluding the $2.7 million sales tax credit, these costs increased
11.4%.

(Credit) Provision for Income Taxes
Income tax credit for the second quarter 2001 was $(1.9) million, a $7.1 million
decrease from the 2000 provision of $5.2 million. The effective tax rates for
the second quarter of 2001 and 2000 were 37.0%. For purposes of calculating the
Company's income tax expense and effective tax rate, the Company treats amounts
payable to an affiliate of Kimberly-Clark Corporation under a tax allocation and
separation agreement entered into in connection with the Company's initial
public offering as if they were payable to taxing authorities.

Net (Loss) Income
Net loss for the second quarter 2001 was $(3.2) million, which reflects a
decrease in net income of $12.0 million from second quarter 2000 net income of
$8.8 million. The net income (loss) margin decreased from 7.0% in second quarter
2000 to (2.4)% in second quarter 2001.

                  Six Months Ended June 30, 2001 Compared with
                         Six Months Ended June 30, 2000

Operating Revenues
Company operating revenues totaled $254.4 million for the six months ended June
30, 2001, a $21.8 million, or 9.4%, increase over the first six months of 2000.
Passenger revenues accounted for 91.2% of total revenues and increased $19.7
million, or 9.3%, from 2000 to $232.0 million. The increase was attributable to
an 11.0% increase in passenger volume, as measured by revenue passenger miles,
offset by a 1.5% decrease in yield. Load factor decreased from 61.7% in 2000 to
60.9% in 2001.

Midwest Express passenger revenue increased $12.9 million, or 7.1%, from 2000 to
$196.4 million in 2001. This increase was caused by a 9.4% increase in passenger
volume, as measured by revenue passenger miles, offset by a 2.1% decrease in
revenue yield. Total Midwest Express capacity, as measured by scheduled service
ASMs, increased 10.9% due to three additional aircraft in service during 2001.
Load factor decreased from 63.0% in 2000 to 62.2% in 2001 due to increased
competition in some markets and softening business travel demand.

Astral passenger revenue increased by $6.8 million, or 23.6%, from 2000 to $35.6
million in 2001. Traffic increased 40.4% on a 32.2% increase in capacity due to
three additional regional jets in service in 2001. Load factor increased from
44.7% in 2000 to 47.5% in 2001. Revenue yield decreased 12.0%, from $0.54 in
2000 to $0.48 in 2001, primarily due to new service in longer flight segments
with lower-than-average system revenue yield.

The Company's revenue from cargo, charter and other services increased $2.1
million, or 10.4%, in 2001. Midwest Express benefited from increased revenue
from Frequent Flyer partnership programs and ticket exchange fees.


                                       14
<PAGE>

Operating Expenses
2001 operating expenses increased $47.5 million, or 21.4%, from 2000 to $269.3
million. The increase was due in part to an $8.8 million impairment charge
associated with eight owned DC-9-10 aircraft. The Company intends to retire the
aircraft beginning in 2003, earlier than originally planned. The increase was
also caused by higher labor costs, increased fuel costs and cost increases in
most categories. The Company's cost per total ASM increased 8.1%, from
13.3(cent) in 2000 to 14.4(cent) in 2001.

Salaries, wages and benefits increased $13.6 million, or 18.8%, from 2000 to
$85.9 million in 2001. The increase includes $0.5 million restructuring charges
related a workforce reduction program that eliminated approximately 250
full-time equivalent positions throughout the Company and resulted in additional
costs for severance pay. The labor cost increase reflects the addition of 202
full-time equivalent employees (88 at Midwest Express and 114 at Astral) since
June 30, 2000 to support additional capacity associated with adding three MD-80
aircraft at Midwest Express and three regional jets at Astral after the
workforce reduction. Increased labor costs were also the result of an increase
in pay scales for most customer service and maintenance employees at Midwest
Express as well as other salary increases throughout the company. These rate
adjustments were implemented based on industry salary surveys and management's
desire to increase pay scales to maintain a competitive position in the
industry. On a cost per total ASM basis, labor costs increased 5.9% from
4.3(cent) in 2000 to 4.6(cent) in 2001.

Aircraft fuel and oil and associated taxes increased $8.0 million, or 19.5%, in
2001. Into-plane fuel prices increased 7.3% in 2001, averaging 97.1(cent) per
gallon in 2001 versus 90.5(cent) per gallon in 2000, resulting in a $3.2 million
unfavorable pre-tax price impact. Fuel consumption increased 11.4% in 2001
because of an increase in flight operations. The Company has not hedged prices
for future fuel requirements.

Commissions increased $1.0 million, or 7.8%, from 2000 to $13.4 million in 2001.
On a cost per total ASM basis, commissions decreased 4.0% from 2000. This
category includes travel agent commissions and credit card commissions. The
increase was primarily due to a 9.3% increase in passenger revenue, offset by
savings realized because of increased travel booked directly through the
Company's reservations centers and Web site, other travel-related Web sites and
ticket counters. Commissions, as a percentage of passenger revenue, were 5.8%
for 2000 and 2001.

Dining service costs increased $1.9 million, or 16.1%, from 2000 to $13.8
million in 2001. The increase was primarily due to a 9.6% increase in origin and
destination passengers at Midwest Express. Total dining service costs per
Midwest Express passenger (including food, beverage, linen, catering equipment
and supplies) increased 4.6%, from $11.82 in 2000 to $12.36 in 2001.

Station rental, landing and other fees increased $2.5 million, or 14.5%, from
2000 to $19.5 million in 2001. The increase was caused by 12.8% more flight
segments at Midwest Express and 10.5% more flight segments at Astral. On a cost
per total ASM basis, these costs increased 1.9%.


                                       15
<PAGE>

Maintenance costs increased by $2.9 million, or 11.1%, from 2000 to $29.4
million in 2001. The increase was caused by higher-than-expected costs
associated with the conversion to a phased airframe maintenance program, whereby
the Company divides major airframe maintenance events into smaller, more
frequent events, and records airframe maintenance costs as they are incurred.
Transitioning each aircraft to the new program required significant one-time
airframe maintenance, resulting in higher costs and additional aircraft
downtime. The increase was also due to higher-than-expected costs associated
with outsourcing a large maintenance project, and a one-time cost to convert
aircraft maintenance manuals to an online system. This increase was partially
offset by a reduction of 17 contract mechanics in second quarter 2001. On a cost
per total ASM basis, this category decreased by 1.1%.

Depreciation and amortization increased $2.2 million, or 27.9%, from 2000 to
$10.2 million in 2001. The increase was primarily the result of depreciation
associated with three additional MD-80 aircraft and three regional jet aircraft
placed in service since June 30, 2000.

Aircraft rental costs were $12.1 million for 2000 and 2001. On a cost per total
ASM basis, these costs decreased 12.2%.

An $8.8 million impairment charge was recorded in 2001 for eight company-owned
DC-9-10 aircraft. During 2001, the Company decided to accelerate the retirement
of these aircraft to begin in 2003. In connection with this decision, the
Company performed an evaluation, in accordance with SFAS No. 121, to determine
whether future cash flows (undiscounted and without interest charges) expected
to result from the use and eventual disposition of these aircraft would be less
than the aggregate carrying amount of these aircraft. As a result of the
evaluation, the Company determined that the estimated future cash flows expected
to be generated by these aircraft would be less than their carrying amounts,
resulting in an impairment as defined by SFAS No. 121. The original cost basis
of these aircraft were reduced to reflect the fair market value at the date of
the decision, resulting in an $8.8 million impairment charge.

Other operating expenses increased $6.8 million, or 33.0%, from 2000 to $27.4
million in 2001. Other operating expenses consists primarily of advertising and
promotion, insurance, property taxes, legal fees consulting services, crew hotel
rooms, reservation fees, administration and other items. The increase was
primarily due to a nonrecurring $2.7 million favorable settlement in 2000 of a
sales and use tax dispute on meals boarded on aircraft in Wisconsin. The
increase was also the result of cost increases in crew hotel rooms, reservation
fees, advertising, flight training, charters, Frequent Flyer program expenses,
communications and other items. In 2001, $1.0 million was incurred to
subcontract charter services due to third-party damage to Midwest Express's
charter aircraft. The Company continues to seek to recover damages from the
third-party. On a cost per total ASM basis, excluding the nonrecurring sales tax
credit, these costs increased 4.6%.

(Credit) Provision for Income Taxes
Income tax expense for the first six months of 2001 was a credit of $(5.7)
million, a decrease of


                                       16
<PAGE>

$10.0 million from the 2000 provision of $4.3 million. The effective tax rate
for the first six months of 2001 and 2000 was 37.0%.

Cumulative Effect of Accounting Changes
In 2000, the Company's cumulative effect of accounting changes, net of
applicable tax, totaled $(4.7) million. In 2000, the charge was $(7.8) million,
net of tax, for a change in accounting methods for Frequent Flyer partner miles,
partially offset by a $3.1 million, net of tax, adjustment for major airframe
maintenance due to the Company's planned transition to divide major airframe
maintenance events into smaller, more frequent events, and to record airframe
maintenance costs as they are incurred.

Net (Loss) Income
Net loss for the first six months of 2001 was $(9.8) million, which reflects a
decrease in net income of $12.3 million from 2000 net income of $2.6 million.
The net (loss) income margin decreased to (3.8%) in 2001 from 1.1% in 2000.

                         Liquidity and Capital Resources

The Company's cash and cash equivalents totaled $17.0 million at June 30, 2001,
compared with $15.7 million at December 31, 2000. Net cash provided by operating
activities totaled $17.0 million for the six months ended June 30, 2001. Net
cash used in investing activities totaled $53.4 million, due to capital
expenditures of $53.6 million, including $1.6 million of purchase deposits on
flight equipment.

As of June 30, 2001, the Company had a working capital deficit of $73.2 million
versus a $69.1 million deficit on December 31, 2000. The working capital deficit
is primarily due to the Company's air traffic liability (which represents
deferred revenue for advance bookings, whereby passengers have purchased tickets
for future flights and revenue is recognized when the passenger travels) and
Frequent Flyer liability program. Because of this, the Company expects to
operate at a working capital deficit, which is common in the airline industry.

As of June 30, 2001, the Company has a $55.0 million revolving bank credit
facility. The Company borrowed $20.0 million under the revolving bank credit
facility in the fourth quarter of 2000, which remains outstanding. The Company
also used the revolving agreement to obtain letters of credit totaling
approximately $16.8 million, which reduces the amount of available credit. The
outstanding letters of credit are used to support financing of the Company's
maintenance facilities and for other purposes.

The Company is in the process of negotiating a replacement credit agreement. The
replacement agreement is likely to result in higher fees, higher interest costs,
include security and revised covenants. The Company anticipates finalizing the
agreement in the third quarter 2001.

Capital spending totaled $53.6 million for the six months ended June 30, 2001.
Capital expenditures primarily consisted of aircraft acquisition and
refurbishment costs $(47.4 million),


                                       17
<PAGE>

engine overhauls and spare parts. The Company anticipates fiscal year 2001
capital spending to be approximately $74.0 million, $61.0 million of which is
associated with the acquisition and refurbishment of aircraft.

During 1999, the Company signed a purchase agreement to acquire four MD-80
series aircraft. The Company has taken delivery of three of the aircraft and
financed the delivery using internal cash flow. The Company has decided to
terminate the contract to purchase the fourth aircraft; that decision was the
result of the soft economy and desire to focus on the Boeing 717 aircraft
beginning in 2003. See Pending Developments section.

In June 2001, one MD-80 aircraft was debt-financed for seven years at a fixed
interest rate. In July 2001, the Company completed a sale and leaseback of an
MD-80 aircraft. The term of the operating lease is ten years.

Leases for three Midwest Express aircraft are guaranteed by Kimberly-Clark
Corporation. The Company paid Kimberly-Clark a guarantee fee equal to 1.25%
annually of the outstanding lease commitments through the end of the initial
lease term that ends June 2001. These aircraft leases which, were scheduled to
expire in June 2001, have been renewed for another 33 months. The Kimberly-Clark
guarantee will remain in effect during the renewal period, no guarantee fees are
required during the renewal period.

Astral's first five regional jet aircraft acquired in 1999 and 2000 were
financed by operating leases over a period of 16.5 years. The three additional
regional jets acquired in December 2000, March 2001 and May 2001 were partially
debt-financed for a period up to 32 months at fixed rates.

The Company's Board of Directors has authorized a $30.0 million common stock
repurchase program. As of June 30, 2001, the Company has repurchased a total of
842,015 shares of common stock at a cost of $17.0 million under the share
repurchase program. No shares were repurchased in second quarter of 2001.

In October 1998, Midwest Express took occupancy of a newly constructed
maintenance facility that is leased from Milwaukee County and located at General
Mitchell International Airport. To finance the $8.2 million project, the City of
Milwaukee issued variable-rate demand industrial development revenue bonds. The
Company's variable lease payments are based on the current interest rate of the
City of Milwaukee's outstanding bonds over the 32-year lease term. The bonds are
secured by a promissory note between Midwest Express and the City of Milwaukee,
with further security provided by a letter of credit from Firstar Bank, National
Association, pursuant to the Company's $55-million credit facility.

On April 23, 2001, the Company completed a $7.0 million financing of a new
maintenance hangar facility currently under construction for Astral Aviation and
is located at General Mitchell International Airport in Milwaukee. The facility
is financed by 32-year, tax-exempt, variable rate, demand industrial revenue
bonds issued by the City of Milwaukee. Milwaukee county, a


                                       18
<PAGE>

government unit is the owner of the facility to ensure the tax-exempt status.
Interest payments made to bondholders and amortization of the principal are
recorded as rent expense.

The Company believes its existing cash and cash equivalents, cash flow from
operations, funds available from credit facilities, and funds available from
financing existing aircraft will be adequate to meet its current working capital
requirements and, assuming no further material deterioration in general economic
conditions or the Company's performance, its anticipated working capital
requirements. However, two new aircraft programs discussed below in the Pending
Developments section will require substantial long-term financing. Availability
of this financing cannot be assured until the financing transactions are
completed close to the aircraft delivery dates, and completion will be subject
among other things to general economic conditions and the Company's financial
condition at the time.

                              Pending Developments

This Form 10-Q filing, particularly this Pending Developments section, contains
forward-looking statements that may state the Company's or management's
intentions, hopes, beliefs, expectations or predictions for the future. In the
following discussion and elsewhere in the report, statements containing words
such as "expect," "anticipate," "believe," "estimate," "goal," "objective" or
similar words are intended to identify forward-looking statements. It is
important to note that the Company's actual results could differ materially from
those projected results due to factors that include but are not limited to
uncertainties related to general economic factors, industry conditions, labor
relations, scheduling developments, government regulations, aircraft maintenance
and refurbishment schedules, potential delays related to acquired aircraft, fuel
costs, competitive developments, availability of financing and interest rates.
Additional information concerning factors that could cause actual results to
differ materially from those in the forward-looking statements is contained from
time to time in the Company's SEC filings, including but not limited to the
Company's prospectus dated May 23, 1996 included in the Registration Statement
on Form S-1 No. 333-03325.

Capacity Growth - In full-year 2001, capacity (as measured by scheduled service
ASMs) is expected to increase 10% at Midwest Express and 34% at Astral. This
capacity growth is expected to result from improved aircraft utilization and
additional aircraft in the Company's fleet.

MD-80 Series Aircraft - In November 1999, the Company signed a purchase
agreement to acquire four MD-80 series aircraft previously operated by
Scandinavian Airlines System ("SAS"). One aircraft was delivered in September
2000, one in February 2001 and one in June 2001. After refurbishment and
modification, one aircraft entered service in June 2001; the second aircraft is
expected to enter scheduled service in fourth quarter 2001 and the third
aircraft in first quarter 2002. These aircraft will be used to increase capacity
on the Company's high-traffic routes, expand service in existing markets and
initiate service in new markets. Although these aircraft are currently owned,
the Company is evaluating sale/leaseback transactions for these aircraft in
2001. The agreement for the fourth aircraft was terminated in May 2001.


                                       19
<PAGE>

Boeing 717 Aircraft - In April 2001, the Company signed a memorandum of
understanding for firm orders for 20 new Boeing 717 aircraft, with purchase
rights for an additional 30 aircraft. The Company expects the cost of the firm
order to be $750 million plus an additional $14 million for seats, galleys and
other equipment. Delivery of the 20 aircraft is expected to begin in February
2003. These aircraft will be used to expand service in existing and new markets,
and also eventually replace the DC-9-10 and DC-9-30 aircraft in the Midwest
Express fleet. Acquisition of these aircraft is subject to receipt of financing,
and the Company is evaluating alternatives.

Regional Jet Aircraft - Astral currently operates eight 32-passenger Fairchild
Dornier 328JET regional jets. The Company also expected to acquire the Fairchild
Dornier 428JET, which was designed as a 44-passenger derivative of the 328JET.
However, Fairchild Dornier canceled its 428JET program in the third quarter of
2000. In light of this cancellation, the Company is currently evaluating the
disposition of the existing fleet of Fairchild Dornier 328JETs. In addition, the
Company filed a demand for arbitration against Dornier Luftfahrt GmbH. The
Company alleges that Fairchild Dornier breached an aircraft purchase agreement
by canceling its 428JET program. The Company plans to seek significant monetary
damages and other relief.

In April 2001, the Company signed a memorandum of understanding placing firm
orders for 20 new Embraer regional jets, with options to purchase 20 additional
aircraft, and in August 2001, the parties signed a purchase agreement relating
to this order. The firm order is valued at $400 million. The Company will
initially acquire the 44-passenger ERJ 140, but may also acquire the
37-passenger ERJ 135 and 50-passenger ERJ 145 aircraft. Delivery of the 20
aircraft is expected to begin in March 2002. These aircraft will be used to
expand service in existing and new Astral markets, and provide Astral with
flexibility to serve markets with differing capacity demands. Acquisition of
these aircraft is subject to receipt of financing, and the Company is evaluating
financing alternatives.

Labor Relations - In April 1999, Midwest Express flight attendants elected the
Association of Flight Attendants ("AFA"), AFL-CIO, a labor union, for
representation in collective bargaining. Negotiations began in January 2000. In
September 2000, AFA requested assistance from the National Mediation Board. The
Company and AFA continue in mediated negotiations.

In June 2001, Astral pilots, represented by Airline Pilots Association ("ALPA"),
a labor union in collective bargaining, began mediated negotiations. The Astral
pilots' contract expires January 27, 2002.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in the Company's market risk since December
31, 2000.


                                       20
<PAGE>

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

At the Company's Annual Meeting of Shareholders held on April 25, 2001, the
following individuals were elected to the Board of Directors:

                                  Authority Granted        Authority Withheld
    John F. Bergstrom                   12,344,437                    317,422
    Fredrick P. Stratton, Jr.           12,340,741                    321,118
    John W. Weekly                      12,347,349                    314,510

The terms of office for the following directors continued after the Company's
Annual Meeting: Samuel K. Skinner, Richard H. Sonnentag, Timothy E. Hoeksema,
Ulice Payne, Jr., James G. Grosklaus, and David H. Treitel. Elizabeth T. Solberg
was appointed to the Company's Board of Directors on April 25, 2001 by the Board
of Directors in accordance with the Bylaws of the Company.

A vote was held to act upon a proposal to amend the Midwest Express Holdings,
Inc. 1995 Stock Option Plan. The shareholders ratified the proposal by the
following vote:

       Votes For       Votes Against           Abstentions            Non-Votes
       ---------       -------------           -----------            ---------
       9,887,890       1,138,873                  47,624              1,587,472


Item 6.  Exhibits and Reports on Form 8-K

           (a)    Exhibits

            10.1  Amendment to Midwest Express Holdings, Inc. 1995 Stock Option
                  Plan, as approved by the Company's shareholders on April 25,
                  2001 (incorporated by reference to Appendix B to the Notice of
                  Annual Meeting and Proxy Statement of Midwest Express
                  Holdings, Inc. for the Annual Meeting of the Shareholders on
                  April 25, 2001 [File No. 001-13934])

           (b)    Reports on Form 8-K

                  No reports on Form 8-K were filed during the quarter ended
            June 30, 2001.


                                       21
<PAGE>

                                   SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                       Midwest Express Holdings, Inc.



Date:   August 14, 2001                 By /s/ Timothy E. Hoeksema
        ----------------                   ------------------------------
                                           Timothy E. Hoeksema
                                           Chairman of the Board, President and
                                           Chief Executive Officer


Date:   August 14, 2001                 By /s/ Robert S. Bahlman
        ----------------                   ---------------------------------
                                           Robert S. Bahlman
                                           Senior Vice President and
                                           Chief Financial Officer





                                       22
<PAGE>

                                  Exhibit Index

Exhibit
Number                     Exhibit

10.1     Amendment to Midwest Express Holdings, Inc. 1995 Stock Option Plan, as
         approved by the Company's shareholders on April 25, 2001 (incorporated
         by reference to Appendix B to the Notice of Annual Meeting and Proxy
         Statement of Midwest Express Holdings, Inc. for the Annual Meeting of
         the Shareholders on April 25, 2001 [File No. 001-13934])