FORM 10-Q

                       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 March 31, 1999

[ ]  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
incorporation or organization)                          Identification No.)

                            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 April 30, 1999,  there were  14,140,936  shares of Common Stock,  $.01 par
value, of the Registrant outstanding.


                                     Page 1

<PAGE>
                         MIDWEST EXPRESS HOLDINGS, INC.

                                    FORM 10-Q

                       For the period ended March 31, 1999


                                      INDEX


                         PART I - FINANCIAL INFORMATION

                                                                      Page No.
Item 1.   Financial Statements (unaudited)

            Consolidated Statements of Income                             3

            Condensed Consolidated Balance Sheets                         4

            Consolidated Statements of Cash Flows                         5

            Unaudited Notes to Consolidated Financial Statements          6

Item 2.   Management's Discussion and Analysis of Results of Operations   6
               and Financial Condition

Item 3.    Quantitative and Qualitative Disclosures about Market Risk    15

                           PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                               15

SIGNATURES                                                               16


                                       2
<PAGE>


PART I - Financial Statements

                         MIDWEST EXPRESS HOLDINGS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                (Dollars in thousands, except per share amounts)
                                   (Unaudited)

                                                           Three Months Ended
                                                                 March 31,
                                                                 --------
                                                            1999        1998
                                                            ----        ----
   Operating revenues:
          Passenger service                               $88,862     $79,201
          Cargo                                             3,033       2,931
          Other                                             6,986       6,280
                                                          -------     -------
            Total operating revenues                       98,881      88,412
                                                          -------     -------
   Operating expenses:   
          Salaries, wages and benefits                     29,021      26,303
          Aircraft fuel and oil                            10,356      11,203
          Commissions                                       7,068       6,625
          Dining services                                   5,198       4,398
          Station rental, landing and other fees            8,003       7,205
          Aircraft maintenance materials and repairs       10,378       7,468
          Depreciation and amortization                     2,970       2,335
          Aircraft rentals                                  4,890       4,711
          Other                                             9,732       8,761
                                                          -------     -------
            Total operating expenses                       87,616      79,009
                                                          -------     -------
   Operating income                                        11,265       9,403
                                                          -------     -------

   Other income (expense):
          Interest income                                     207         413
          Interest expense                                    (69)        (71)
          Other                                               (38)        (17)
            Total other income (expense)                      100         325

  Income before income taxes                               11,365       9,728
  Provision for income taxes                                4,262       3,648
                                                          -------     -------
  Net income                                              $ 7,103     $ 6,080
                                                          =======     =======

   Net income per common share-- basic                    $  0.50     $  0.43
                                                          =======     =======
   Net income per common share-- diluted                  $  0.50     $  0.43
                                                          =======     =======


                 See notes to consolidated financial statements.


                                       3
<PAGE>


PART I - Financial Statements

                         MIDWEST EXPRESS HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

                                                        March 31,   December 31,
                                                          1999         1998
                                                          ----         ----
                                                       (Unaudited)
                                     ASSETS
Current assets:
     Cash and cash equivalents                           $  6,246     $ 13,455
     Accounts receivable:
       Traffic, less allowance for doubtful
        accounts of $246 and $251 at March 31, 1999
        and December 31, 1998, respectively                 6,530        5,450
       Other                                                3,129        3,804
                                                         --------     --------
       Total accounts receivable                            9,659        9,254
     Inventories                                            4,374        4,020
     Prepaid expenses                                       6,616        6,358
     Deferred income taxes                                  5,398        5,521
     Aircraft and modifications intended to be financed
       by sale and leaseback transactions                      --          951
                                                         --------     --------
                  Total current assets                     32,293       39,559
Property and equipment, at cost                           279,612      243,284
     Less accumulated depreciation                         86,359       82,701
                                                         --------     --------
Net property and equipment                                193,253      160,583
Landing slots and leasehold rights, net                     4,491        4,572
Purchase deposits on flight equipment                       3,817       13,383
Other assets                                                2,932        2,380
                                                         --------     --------
Total assets                                             $236,786     $220,477
                                                         ========     ========

          LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                      $5,955       $5,064
     Income taxes payable                                   4,245        2,305
     Air traffic liability                                 41,392       35,285
     Accrued liabilities                                   37,363       39,367
                                                         --------     --------
                  Total current liabilities                88,955       82,021
Long-term debt                                              3,175        3,206
Deferred income taxes                                      12,714       13,647
Noncurrent scheduled maintenance expense                   13,162       12,082
Accrued pension and other postretirement benefits           7,709        6,201
Other noncurrent liabilities                                5,571        5,688
                                                         --------     --------
Total liabilities                                         131,286      122,845
Shareholders' equity:
     Preferred stock, without par value, 5,000,000 
      shares authorized, no shares issued or outstanding      n/a          n/a
     Common stock, $.01 par value, 25,000,000 shares
      authorized, 14,512,306 shares issued in 1999 and
      14,464,056  in 1998                                     145          145
     Additional paid-in capital                            10,493        9,680
     Treasury stock, at cost;  382,661 shares in 1999 
      and 381,015 shares in 1998                           (6,449)      (6,401)
     Retained earnings                                    101,311       94,208
                                                         --------     --------
Total shareholders' equity                                105,500       97,632
                                                         --------     --------
Total liabilities and shareholders' equity               $236,786     $220,477
                                                         ========     ========

                 See notes to consolidated financial statements.


                                       4
<PAGE>


PART I - Financial Statements

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

                                                          Three Months Ended
                                                               March 31,
                                                               --------
                                                          1999           1998
                                                          ----           ----
Operating activities:
     Net income                                         $ 7,103        $ 6,080
     Items not involving the use of cash:
         Depreciation and amortization                    2,970          2,335
         Deferred income taxes                             (110)          (573)
         Other                                            1,233          1,192
     Changes in operating assets and liabilities:
         Accounts receivable                               (405)        (1,795)
         Inventories                                       (354)           328
         Prepaid expenses                                  (958)        (2,497)
         Accounts payable                                   891          1,136
         Income taxes payable                             1,940          3,520
         Accrued liabilities                             (1,754)        (3,392)
         Air traffic liability                            6,107          5,163
                                                        -------        -------
     Net cash provided by operating activities           16,663         11,497
                                                        -------        -------
Investing activities:
     Capital expenditures                               (26,337)        (9,510)
     Purchase deposits on flight equipment                 (900)            --
     Other                                                 (791)        (1,302)
                                                        -------        -------
     Net cash used in investing activities              (28,028)       (10,812)
                                                        -------        -------
Financing activities:
     Proceeds from sale and leaseback transactions          951             --
     Other                                                3,205          2,238
                                                        -------        -------
     Net cash provided by  financing activities           4,156          2,238
                                                        -------        -------
Net (decrease) increase in cash and cash equivalents     (7,209)         2,923
Cash and cash equivalents, beginning of period           13,455         32,066
                                                        -------        -------
Cash and cash equivalents, end of period                $ 6,246        $34,989
                                                        =======        =======

Supplemental schedule of investing activities:
   Transfer of flight equipment from purchase 
    deposits to property and equipment                  $10,466        $    --


                 See notes to consolidated financial statements.


                                       5
<PAGE>


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

1. Business and Basis of Presentation

Basis of Presentation
---------------------
The consolidated financial statements for the three-month period ended March 31,
1999 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  consolidated  financial  statements  should  be  read  in
conjunction  with the  consolidated  financial  statements  and  notes  thereto,
together with  management's  discussion and analysis of financial  condition and
results of operations,  contained in the Company's Annual Report to Shareholders
and  incorporated  by reference in the Company's  Annual Report on Form 10-K for
the year ended December 31, 1998. The results of operations for the  three-month
period ended March 31, 1999 are not  necessarily  indicative  of the results for
the entire fiscal year ending December 31, 1999.

2. New Accounting Standards

In  1998,  the  Financial  Accounting  Standards  Board  issued  SFAS  No.  133,
"Accounting for Derivative  Instruments and Hedging  Activities." The Company is
currently in the process of evaluating the accounting and disclosure  effects of
this  Statement and  anticipates  adopting the Statement in the first quarter of
2000.

3.  Segment Reporting

Midwest Express and Astral,  doing business as Skyway  Airlines,  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 year ended December 31, 1998.  Financial  information for the three
months ended March 31 on the two operating segments, Midwest Express and Astral,
follows (in thousands):

                             Midwest
1999                         Express       Astral    Elimination  Consolidation
----                         -------       ------    -----------  -------------
Operating Revenues          $ 89,840      $ 9,892      $   (851)    $ 98,881
Operating Income              11,196           69           ---       11,265
Depreciation and
   Amortization Expenses       2,771          199           ---        2,970
Interest Income                  207          132          (132)         207
Interest Expense                 201          ---          (132)          69
Income Before Income Taxes    11,164          201           ---       11,365
Provision for Income Taxes     4,186           76           ---        4,262
Total Assets                 226,507       21,092       (10,813)     236,786
Capital Expenditures        $ 25,540      $   797      $    ---     $ 26,337


                                       6
<PAGE>

                             Midwest
1998                         Express       Astral    Elimination  Consolidation
----                         -------       ------    -----------  -------------
Operating Revenues          $ 79,800      $ 9,518      $   (906)    $ 88,412
Operating Income               9,411           (8)          ---        9,403
Depreciation and
   Amortization Expenses       2,169          166           ---        2,335
Interest Income                  413          108          (108)         413
Interest Expense                 179          ---          (108)          71
Income Before Income Taxes     9,628          100           ---        9,728
Provision for Income Taxes     3,610           38           ---        3,648
Total Assets                 173,833       17,609        (9,479)     181,963
Capital Expenditures        $  9,479      $    31      $    ---     $  9,510


PART I Item 2.

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

                              Results of Operations
Overview
--------
The Company's 1999 first quarter operating income was $11.3 million, an increase
of $1.9  million  from the first  quarter  1998.  Net income  increased  by $1.0
million,  or 16.8%,  to $7.1  million.  Year-to-date  net  income per share on a
diluted basis was $.50, a $.07 or 16.3% increase over 1998 results.

The Company's  total revenue in the first quarter  increased  $10.5 million,  or
11.8%,  relative to the first quarter 1998.  The favorable  change in revenue in
the quarter was primarily  the result of increased  passenger  volume  resulting
from strong  passenger  demand for air travel  throughout the industry.  Traffic
increased by 21.0% on 19.0% increased capacity.  Revenue yield decreased 6.7% as
a result of competitive  pricing pressures.  The Company also realized increased
supplemental revenue from the Midwest Express credit card program.

The Company's  operating  costs increased by $8.6 million or 10.9% primarily due
to increases in  maintenance,  depreciation,  dining  services,  labor and other
expenses  associated with service  expansion.  These higher costs were partially
offset by lower fuel prices. The Company benefited from significantly lower fuel
prices in the first quarter 1999,  which  averaged  18.2% less than in the first
quarter 1998 and favorably impacted operating income by $2.3 million.  On a cost
per available seat mile (ASM) basis, costs decreased 6.3%, or 4.1% excluding the
impact of fuel price.  Unit costs  decreased  due to the three  larger  capacity
MD-80 aircraft placed in service, improved fixed cost absorption associated with
the 19% capacity  increase,  and efforts  throughout the Company to lower costs.
Additional detail on cost changes is included in subsequent sections.


                                       7
<PAGE>

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

                                                     Three Months Ended
                                                         March 31,
                                                    -------------------
                                                                             %
                                                       1999       1998    Change
                                                     -------    -------   ------
 Midwest Express Operations
 --------------------------
 Origin & Destination Passengers                     442,590    375,618     17.8
 Revenue Passenger Miles (000s)                      427,349    351,856     21.5
 Scheduled Service Available Seat Miles (000s)       705,236    585,786     20.4
 Total Available Seat Miles (000s)                   713,847    596,659     19.6
 Load Factor (%)                                       60.6%      60.1%  0.5 pts
 Revenue Yield                                        $0.185     $0.198     -6.7
 Cost per total ASM                                   $0.110     $0.118     -6.6
 Average Passenger Trip Length                         965.6      936.7      3.1
 Number of Flights                                    10,798      9,793     10.3
 Into-plane Fuel Cost per Gallon                      $0.503     $0.615    -18.2
 Full-time equivalent Employees at End of Period       2,219      1,934     14.8
 Aircraft in Service at End of Period                     29         24     20.8

 Skyway Airlines Operations
 --------------------------
 Origin & Destination Passengers                      79,845     70,863     12.7
 Revenue Passenger Miles (000s)                       18,141     16,434     10.4
 Scheduled Service Available Seat Miles (000s)        39,078     39,520     -1.1
 Total Available Seat Miles (000s)                    39,219     39,555     -0.8
 Load Factor (%)                                       46.4%      41.6%  4.8 pts
 Revenue Yield                                        $0.540     $0.574     -5.9
 Cost per total ASM                                   $0.250     $0.241      4.0
 Average Passenger Trip Length                         227.2      231.9     -2.0
 Number of Flights                                    10,443     10,517     -0.7
 Into-plane Fuel Cost per Gallon                      $0.555     $0.675    -17.9
 Full-time equivalent Employees at End of Period         335        278     20.5
 Aircraft in Service at End of Period                     15         15        -


Note:All statistics  exclude  charter  operations  except the  following:  total
     available seat miles  ("ASM"),  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  statistics.
     Numbers in this table may not be recalculated due to rounding.


                                       8
<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.

                                               Three Months Ended March 31,
                                               ---------------------------
                                                   1999              1998
                                                   ----              ----
                                           Per Total    % of   Per Total   % of
                                              ASM     Revenue     ASM    Revenue
                                           ---------  -------  --------- -------
Operating revenues:
Passenger service                           $0.118     89.9%    $0.124     89.6%
Cargo                                        0.004      3.1%     0.005      3.3%
Other                                        0.009      7.0%     0.010      7.1%
                                           -------    ------   -------    ------
Total operating revenues                     0.131    100.0%     0.139    100.0%

Operating expenses:
Salaries, wages and benefits                 0.038     29.3%     0.041     29.8%
Aircraft fuel and oil                        0.014     10.5%     0.018     12.7%
Commissions                                  0.009      7.2%     0.010      7.5%
Dining services                              0.007      5.3%     0.007      5.0%
Station rental, landing and other fees       0.011      8.1%     0.011      8.2%
Aircraft maintenance materials and repairs   0.014     10.5%     0.012      8.4%
Depreciation and amortization                0.004      3.0%     0.004      2.6%
Aircraft rentals                             0.006      4.9%     0.007      5.3%
Other                                        0.013      9.8%     0.014      9.9%
                                           -------    ------   -------    ------
Total operating expenses                    $0.116     88.6%    $0.124     89.4%
                                           =======    ======   =======    ======

Total ASMs (000s)                          753,066             636,214

Note: Numbers in this table may not be recalculated due to rounding.


                  Three Months Ended March 31, 1999 Compared to
                        Three Months Ended March 31, 1998

Operating Revenues
------------------
Company  operating  revenues  totaled $98.9 million in the first quarter 1999, a
$10.5  million,  or 11.8%,  increase  over the  first  quarter  1998.  Passenger
revenues  accounted for 89.9% of total revenues and increased  $9.7 million,  or
12.2%,  from 1998 to $88.9  million.  The  increase is  attributable  to a 21.0%
increase in passenger volume, as measured by revenue passenger miles.

Midwest Express passenger revenue increased by $9.3 million, or 13.3%, from 1998
to $79.1  million.  This  increase was caused by a 17.8%  increase in origin and
destination  passengers.  Total capacity, as measured by scheduled service ASMs,
increased 20.4% due to five additional  aircraft in scheduled service during the
first quarter 1999.  Also, load factor  increased from 60.1% in 1998 to 60.6% in
1999  due  to  strong  travel  demand.  Revenue  yield  decreased  6.7%  due  to
competitive  pricing  pressure,  Northwest  Airlines' fare sales following their
pilots' strike,  operating  larger aircraft on certain routes,  3.1% increase in
average   passenger   trip  length  and  an  89%  increase  in  traffic  in  the
Milwaukee-Phoenix market which has lower than average yields.

Skyway passenger  revenue  increased by $.4 million,  or 3.9%, from 1998 to $9.8
million.  This increase was caused by a 10.4% increase in passenger volume. Load
factor  increased  from  41.6%  in 1998 to  46.4% in 1999  while  revenue  yield
decreased 5.9% due to lower overall pricing levels.

Revenue  from cargo,  charter and other  services  increased  $.8 million in the
first quarter 1999.  Midwest Express  benefited from increased  revenue from the
Midwest Express MasterCard


                                       9
<PAGE>

program  of $.8  million.  Charter  revenue  decreased  $.3  million  due to the
National Basketball Association (NBA) lockout which resulted in the cancellation
of scheduled charters.


Operating Expenses
------------------
1999  operating  expenses  increased by $8.6 million,  or 10.9%,  from 1998. The
increase was primarily the result of service expansion. Midwest Express operated
10.3% more  flights  during the  quarter  and had five  additional  aircraft  in
service.  Offsetting higher costs in most categories were lower fuel costs. Cost
per total ASM decreased 6.3%, from 12.4(cent) in 1998 to 11.6(cent) in 1999.

Salaries, wages and benefits increased by $2.7 million, or 10.3%. The labor cost
increase  reflects  the  addition  of  approximately  343  full-time  equivalent
employees  (286 at Midwest  Express and 57 at Skyway)  since March 31, 1998,  as
well as increases in labor rates. Midwest Express added employees throughout the
organization  to support  additional  aircraft  placed in service;  Skyway added
employees  primarily  to support  ground  service  operations  at the  Milwaukee
airport.  On a cost per  total ASM  basis,  labor  costs  decreased  7.0%,  from
4.1(cent) in 1998 to 3.9(cent) in 1999.

Aircraft fuel and oil and associated  taxes  decreased $.8 million,  or 7.6%, in
first quarter 1999.  Into-plane fuel prices  decreased 18.2% in 1999,  averaging
50.7(cent)  per  gallon in 1999  versus  62.0(cent)  per  gallon  in 1998.  Fuel
consumption increased by 13.2% in the quarter, primarily because Midwest Express
operated  12.6% more  aircraft  flight  hours.  Fuel costs in April 1999 trended
upward, averaging 53.6(cent) per gallon.

Commissions increased by $.4 million, or 6.7%. The increase was primarily due to
a 12.2% increase in passenger revenue,  partially offset by a new commission cap
implemented  February 1, 1999. In addition,  the Company realized an increase in
travel booked directly through the reservation center,  Midwest Express web site
and other travel  related web sites not subject to  commission.  The  commission
cap, which is similar to most other airlines, limits travel agent commissions to
$50 per round-trip ticket and $25 per one-way ticket.

Dining  services  costs  increased  by $.8  million,  or 18.1%,  from 1998.  The
increase was primarily due to the 17.8%  increase in Midwest  Express origin and
destination passengers.

Maintenance  costs increased by $2.9 million,  or 38.9%, from 1998. The increase
was caused by higher than expected  costs  associated  with  outsourcing a heavy
airframe overhaul,  more flight hours at Midwest Express and higher material and
aircraft component repair costs. During the quarter, one aircraft was outsourced
for heavy  maintenance.  The cost of this  maintenance  exceeded the estimate by
over  $1.0  million.  No  additional  airframe   maintenance  is  scheduled  for
outsourcing in 1999.

Station rental,  landing and other fees increased by $.8 million, or 11.1%, from
1998. The increase was caused by 10.3% more flight segments at Midwest  Express.
On a cost per ASM basis, these costs decreased 6.2%.

Depreciation and amortization increased by $.6 million, or 27.2%, from 1998. The
increase was  primarily  the result of the  depreciation  associated  with three
additional MD-80 aircraft placed in


                                       10
<PAGE>

service.

Aircraft rental costs  increased by $.2 million,  or 3.8%, from 1998 as a result
of full year lease payments versus partial lease payments on two Midwest Express
DC-9-30 aircraft that were placed into service during the second quarter 1998.

Other costs  increased by $1.0 million,  or 11.1%,  from 1998.  Other  operating
expenses  consist  primarily of advertising and promotion,  insurance,  property
taxes,  reservation  fees,  administration  and other  items.  The  increase was
primarily due to higher costs for professional services, passenger booking fees,
property taxes and communication costs.


Provision for Income Taxes
--------------------------
Income tax expense for the first  quarter 1999 was $4.3  million,  a $.6 million
increase  from 1998.  The  effective  tax rate for the first quarter of 1999 and
1998 was 37.5%. 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  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 Income
----------
Net income for the first  quarter  increased  $1.0  million  from 1998.  The net
income margin improved from 6.9% in 1998 to 7.2% in 1999.


                                       11
<PAGE>


                         Liquidity and Capital Resources

The Company's cash and cash equivalents  totaled $6.2 million at March 31, 1999,
compared to $13.5  million at December 31, 1998.  Net cash provided by operating
activities  totaled $16.7 million for the three months ended March 31, 1999. Net
cash used in  investing  activities  totaled  $28.0  million,  primarily  due to
capital  expenditures  of $27.2  million,  including  $.9  million  of  purchase
deposits on flight equipment.

As of March 31, 1999, the Company had a working capital deficit of $56.7 million
versus a $42.5 million deficit on December 31, 1998. 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,  that is recognized when the passenger travels).  Because of
this, the Company expects to operate at a working capital deficit,  which is not
unusual for the industry.

As of March 31, 1999,  the  Company's  two credit  facilities,  a $55.0  million
revolving bank credit facility and a $20.0 million  secondary  revolving  credit
facility  with  Kimberly-Clark,  have not been used except for letters of credit
totaling approximately $14.9 million that reduce the amount of available credit.
The letters of credit are used to secure certain  reserve amounts for stipulated
airframe and engine  maintenance on Midwest Express' MD-88 aircraft,  to support
financing  on the  Company's  new  maintenance  facility  and for various  other
purposes.

Net cash used for  capital  expenditures  totaled  $27.2  million  for the three
months  ended  March 31,  1999.  Capital  expenditures  primarily  consisted  of
aircraft purchases and refurbishment costs. Other capital expenditures  included
aircraft  engine  hush  kit  components,   engine   overhauls,   acquisition  of
capitalized  spare  parts and the  Skyway  concourse  expansion  at the  General
Mitchell  International airport in Milwaukee.  The Company anticipates full year
capital  spending to be $80 million,  excluding  the five regional jets that the
Company  plans to acquire  during the second  half of the year.  The  Company is
planning on leasing these aircraft.

During 1997, the Company executed definitive purchase documents to acquire eight
McDonnell  Douglas MD-80 series  aircraft.  The Company  financed the first five
deliveries,  including  refurbishment  costs primarily using internal cash flow,
and expects to finance the remaining  three aircraft using internal cash flow as
well.

As of March 31, 1999,  leases relating to three of Midwest Express' jet aircraft
are  guaranteed  by  Kimberly-Clark  in return for a  guarantee  fee paid by the
Company. Kimberly-Clark will continue to guarantee these leases until the end of
the current lease terms. None of these jet aircraft leases expires before second
quarter 2001.

In April 1999,  the Company  renegotiated  two MD-88 aircraft  leases,  changing
lessors and extending the lease to 12 years.  This transaction will reduce lease
cost by $.6 million in 1999.

The Company's Board of Directors has authorized a $15.0 million share repurchase
program.  As of March 31,  1999,  the Company  has  purchased a total of 418,625
shares  of common  stock at a cost of $6.8  million  under the share  repurchase
program.


                                       12
<PAGE>

The Company  believes its  existing  cash and cash  equivalents,  cash flow from
operations,  funds  available  from credit  facilities  and available  long-term
financing  for the  acquisition  of jet  aircraft  will be  adequate to meet its
current and anticipated working capital requirements and capital expenditures.


                              Pending Developments

This Form 10-Q  filing,  and  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. 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,
scheduling  developments,  government  regulations,  labor  relations,  aircraft
maintenance and  refurbishment  schedules,  potential delays related to acquired
aircraft,   fuel  prices  and  year  2000  compliance.   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 Registration Statement on Form S-1 No. 333-03325.

MD-80 -- Aircraft  During  January 1999 Midwest  Express placed into service the
second and third of eight MD-80 series  aircraft the Company  agreed to purchase
in 1997.  The fourth  aircraft was placed into service in April 1999.  The fifth
and sixth aircraft are currently being refurbished and have scheduled in-service
dates of August and December.  The seventh and eighth  aircraft will be received
in the fourth  quarter and are expected to enter service in the first and second
quarters of 2000. The Company has financed all deliveries thus far with internal
cash flow and expects to do the same for the remaining aircraft.  These aircraft
will be used to  increase  capacity  on the  Company's  high-traffic  routes and
expand service in existing or new markets.

Regional  Jets --  Skyway  expects  to take  delivery  of the  first of five new
Fairchild Aerospace 328JET aircraft in July 1999. All five are expected to be in
service by the end of 1999.  The Company  also holds  options for 10  additional
aircraft to support future growth,  which are exercisable after January 1, 2001.
Plans for these  32-passenger  aircraft  have not been  announced.  The  Company
expects  that the cost of these  five  aircraft,  including  purchase  price and
support equipment,  will total approximately $55.0 million, and will be financed
via operating leases as deliveries take place.

Labor  Relations -- In December 1997 Midwest Express pilots elected the Air Line
Pilots  Association  ("ALPA"),  a labor union, for  representation in collective
bargaining.  Negotiations  are  in  process.  In  January  1998,  Skyway  pilots
represented  by ALPA ratified a four-year  labor  contract.  In April 1999,  the
flight attendants elected the Association of Flight Attendants, AFL-CIO, a labor
union, for  representation in collective  bargaining.  Negotiations have not yet
begun. No other employees in the Company are currently unionized.

Year  2000 -- The  Company  established  a year  2000  team in  January  1998 to
evaluate and remediate any year 2000 issues. As a result of the Company becoming
publicly owned in September 1995, many systems required  immediate  replacement.
All of the  replacement  systems  purchased  were 


                                       13
<PAGE>

represented to be year-2000  compliant by their respective vendors. In mid-1997,
the Company  designed and  implemented  a technology  infrastructure  comprising
almost all year 2000-compliant products.

The Company  developed a  comprehensive  plan to address  issues  related to the
impact  of the year  2000 on its  business.  The  Company's  Year  2000  Project
involves five phases: Awareness,  Inventory/Assessment,  Renovation,  Validation
and Implementation.  Internal financial, operations,  non-information technology
systems and external  interfaces have been  inventoried and assessed,  and plans
have been developed to remediate any non-compliant  systems. The Company has one
major internally developed and maintained system that requires modifications and
to facilitate the remediation of this system, the Company has contracted with an
outside  consultant.  This  system  which  is used  for  purchasing,  inventory,
accounts payable and aircraft  maintenance  planning and records is scheduled to
be compliant by September  1999. The Company  completed its review of the impact
of year 2000 issues on its aircraft fleet and has determined there are no safety
of flight issues.  The majority of the Company's  systems,  including all safety
and regulatory related systems are expected to be year 2000-compliant by the end
of second  quarter 1999.  Midwest  Express and Skyway's  operating  aircraft are
fully  year  2000-compliant.   The  Company  estimates  that  the  overall  cost
associated with year 2000 readiness will approximate $1.1 million, approximately
50% of  which  is  from  reallocation  of  existing  internal  resources.  Costs
associated  with year 2000  readiness  are  expensed as  incurred  and have been
funded using internal cash flow.

The Company  realizes  that  preparedness  is also  predicated  on many external
factors.  Therefore,  the Company is actively pursuing  suppliers and vendors to
evaluate their respective levels of preparedness.  Questionnaires were mailed to
the most critical  suppliers and vendors and evaluation of their preparedness is
in process.  Follow-up  action is dictated  by the  priority of the  services or
commodity  used, and the response  received.  The company is also  participating
with the airline  industry to identify  potential  year  2000-related  issues at
airports  and within the  industry  infrastructure,  including  common  vendors,
suppliers,   and   government   agencies,   including   the   Federal   Aviation
Administration  ("FAA").  The April 13th U.S.  Department of Transportation news
release  acknowledges  that recent tests conducted by the FAA demonstrated  that
the nations' air traffic control system will be ready for the Year 2000.

The implications for the Company,  a critical vendor or supplier,  or the FAA of
not being prepared for the year 2000 could have a material adverse effect on the
Company,  resulting  in customer  inconvenience,  increased  costs,  grounded or
delayed  flights,  or a degraded  level of  safety.  To be  prepared  to address
unexpected  occurrences,   contingency  plans  are  being  developed  for  those
scenarios  within the Company's  control.  However,  due to the  complexity  and
pervasiveness  of the  year  2000  issue,  and  in  particular  the  uncertainty
regarding the compliance  programs of third  parties,  no assurance can be given
that the Company's  estimates will be achieved,  and actual results could differ
materially from those anticipated.

Other Issues - The Company's Annual Report for the year ended December 31, 1998,
disclosed  certain issues relating to the  maintenance  program and sales taxes.
These issues remain pending.


                                       14
<PAGE>


Item 3. Quantitative and Qualitative Disclosures about Market Risk
------------------------------------------------------------------

         There have been no material  changes in the Company's market risk since
December 31, 1998.


PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------
          (a) Exhibits
              --------
              (10)  Thirteenth  Amendment to Airline Lease,  as amended between
              Milwaukee County and Midwest Express, dated April 5, 1999.

              (27) Financial Data Schedule.

          (b) Reports on Form 8-K
              -------------------
              No reports on Form 8-K were filed during the quarter  ended March
              31, 1999.


                                       15
<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:  May 14, 1999                 By /s/ Timothy E. Hoeksema       
       ------------                 Timothy E. Hoeksema
                                    Chairman of the Board, President
                                    and Chief Executive Officer

Date:  May 14, 1999                 By /s/ Robert S. Bahlman          
       ------------                 Robert S. Bahlman
                                    Senior Vice President and Chief Financial
                                    Officer


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