Document:

<PAGE>

                             Note to Exhibit 10.20

            The following Purchase Agreement Assignment is substantially
identical in all material respects to two additional Purchase Agreement
Assignments except as follows:

--------------------------------------------------------------------------------
Aircraft (Tail No.)
--------------------------------------------------------------------------------
N588ML*
--------------------------------------------------------------------------------
N589ML
--------------------------------------------------------------------------------
N590ML
--------------------------------------------------------------------------------

----------
* Filed document
<PAGE>

                                                                   Exhibit 10.20

          PURCHASE AGREEMENT ASSIGNMENT  N588ML  (the "Assignment"), dated as of
September 21, 2000, between MIDWAY AIRLINES CORPORATION, a Delaware corporation
(herein called the "Assignor") and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Owner Trustee (herein called the "Assignee").

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

          WHEREAS, the Assignor and Bombardier, Inc. (the "Manufacturer") are
parties to the Purchase Agreement, providing, among other things, for the
manufacture by the Manufacturer and the sale by the Manufacturer to the Assignor
of certain aircraft, engines and related equipment, including the Aircraft; and

          WHEREAS, the Assignee wishes to acquire the Aircraft from Bombardier
Capital Inc. (the "Seller)" and the Assignor, on the terms and conditions
hereinafter set forth, wishes to assign to the Assignee certain of the
Assignor's rights and interests under the Purchase Agreement and the Assignee is
willing to accept such assignment, as hereinafter set forth; and

          WHEREAS, the Assignee intends to lease to the Assignor, and the
Assignor intends to lease from the Assignee, the Aircraft pursuant to the Lease
Agreement N588ML dated as of September 21, 2000 as the same may be amended,
modified or supplemented, between the Assignee, as lessor, and the Assignor, as
lessee, providing for the lease of the Aircraft (the "Lease").

          NOW, THEREFORE, in consideration of mutual covenants and agreements
herein contained and for other valuable consideration, receipt of which is
hereby acknowledged by the Assignor, the parties hereto agree as follows:

          1.   For all purposes of this Assignment, except as otherwise
expressly provided or unless the context otherwise requires, all terms used
herein in capitalized form and not otherwise defined herein, shall have the
meanings set forth in Appendix A to the Lease.

          2.   Subject to the terms and conditions of this Assignment, Assignor
does hereby sell, assign and convey to Assignee, its successors and permitted
assigns all of Assignor's rights in and to the Purchase Agreement as and to the
extent that the same relate to the Aircraft and the purchase and operation
thereof  (except to the extent reserved below), including, without limitation,
all warranty and indemnity provisions in the Purchase Agreement with respect to
the Aircraft and all claims thereunder in respect of the Aircraft, and any and
all rights of the Assignor to compel performance of the terms of the Purchase
Agreement in respect of the Aircraft, reserving to Assignor, however, (i) all
                                      --------- -- --------  -------
the Assignor's rights and interests in and to the Purchase Agreement to the
extent that each relates to aircraft other than the Aircraft and the purchase
and operation of such aircraft and
<PAGE>

to the extent that each relates to any other matters not directly pertaining to
the Aircraft, (ii) so long as the Aircraft shall be subject to the Lease and no
Event of Default shall have occurred and be continuing and the Assignee or the
Indenture Trustee (as assignee of the Assignee) has not commenced the exercise
of remedies set forth in Section 17 of the Lease, all rights of the Assignor to
obtain services, training, product support, promotional support, publications or
demonstrations and test flights pursuant to the Purchase Agreement, and (iii)
with respect to the Aircraft, all of Assignor's rights with respect to payments
made by Assignor pursuant to the Purchase Agreement (including without
limitation any post-delivery adjustments to the purchase price or amounts
credited or to be credited by the Manufacturer to Assignor other than those
arising from events which would have the effect of decreasing the Fair Market
Sales Value of the Aircraft at the end of the Term). The foregoing assignment is
subject to the conditions that (i) concurrently with its execution, Assignee
shall lease the Aircraft to Assignor under the Lease and (ii) the written
consent of the Manufacturer to such assignment (the "Consent and Agreement") be
provided in the form of the Annex hereto.

          Unless an Event of Default shall have occurred and be continuing and
the Assignee or the Indenture Trustee (as assignee of the Assignee) shall have
commenced the exercise of remedies set forth in Section 17 of the Lease, and
subject to the provisions hereof, the Assignee shall and it does hereby
authorize the Assignor during the Term as Lessee under the Lease, to the
exclusion of the Assignee, to exercise in the Assignor's name, all rights and
powers of the "Buyer" under the Purchase Agreement and any warranty with respect
to the Aircraft made by the Manufacturer or any subcontractor or supplier, and
any other claims against the Manufacturer or any such subcontractor or supplier
with respect to the Aircraft, except that the Assignor may not enter into any
change, order or other amendment, modification or supplement to the Purchase
Agreement insofar as it relates to the Aircraft without the written consent of
the Assignee if such change, order, amendment, modification or supplement would
result in any recission, cancellation or termination of the Purchase Agreement
in respect to the Aircraft or otherwise materially adversely affect the rights
assigned hereunder to Assignee.  Any recovery or benefit resulting from
enforcement of any warranty, indemnity or claim shall be applied to remedy any
defect in respect of the Aircraft (or to reimburse the Assignor for its
remedying of any such defect) and the balance to be paid to the Assignor or the
Assignee, as their interests may appear.  Assignee hereby accepts the foregoing
assignment subject to the terms hereof.

          3.   It is expressly agreed that, anything herein contained to the
contrary notwithstanding:  (a) the Assignor shall at all times remain liable to
the Manufacturer under the Purchase Agreement to perform all the duties and
obligations of the "Buyer" thereunder to the same extent as if this Assignment
had not been executed; (b) the exercise by the Assignee of any of the rights
assigned hereunder shall not release the Assignor from any of its duties or
obligations to the Manufacturer under the Purchase Agreement except to the
extent that such exercise by the Assignee shall constitute performance of such
duties and obligations; and (c) none of the Indenture Trustee, the Loan
Participants, the Owner Participant, the Noteholders and the Trust Company nor,
except as provided in the next paragraph, the Assignee, shall have any
obligation or liability under the Purchase Agreement by reason of, or arising
out of, this Assignment or be obligated to perform any

                                      -2-
<PAGE>

of the obligations or duties of the Assignor under the Purchase Agreement or to
make any payment or to make any inquiry as to the sufficiency of any payment
received by it or to present or file any claim or to take any other action to
collect or enforce any claim for any payment assignment hereunder.

          Without in any way releasing the Assignor from any of its duties or
obligations under the Purchase Agreement, the Assignee confirms for the benefit
of the Manufacturer that, insofar as the provisions of the Purchase Agreement
relate to the Aircraft, in exercising any rights under the Purchase Agreement,
or in making any claim with respect to the Aircraft or other things (including
data, documents, training and services) delivered or to be delivered pursuant to
the Purchase Agreement, the terms and conditions of the Purchase Agreement shall
apply to, and be binding upon, the Assignee to the same extent as the Assignor.
Nothing contained herein shall in any way diminish or limit the provisions of
the Assignor's indemnities in the Lease and the Participation Agreement and in
the Purchase Agreement with respect to any liability of the Assignee to the
Manufacturer in any way relating to or arising out of this Assignment.

          Nothing contained herein shall subject the Manufacturer to any
liability to which it would not otherwise be subject under the Purchase
Agreement or modify in any respect the contract rights of the Manufacturer under
the Purchase Agreement.

          At any time after an Event of Default shall have occurred and be
continuing and the Assignee shall have commenced the exercise of remedies set
forth in Section 17 of the Lease, the Assignee or the Indenture Trustee (as
assignee of the Assignee) and its successors and permitted as  signs shall, to
the exclusion of the Assignor, be entitled to assert and enforce all rights and
claims of the "Buyer" under the Purchase Agreement assigned hereunder (including
the right to receive payments), and the Assignor agrees to cooperate with the
Assignee in asserting such rights and claims, and the Assignor does hereby
constitute, effective at any time after an Event of Default shall have occurred
and be continuing and the Assignee or the Indenture Trustee (as assignee of the
Assignee) shall have commenced the exercise of remedies set forth in Section 17
of the Lease, the Assignee, its successors and assigns, the Assignor's true and
lawful attorney, irrevocably, with full power (in the name of the Assignor or
otherwise) to ask, require, demand, receive, compound and give acquittance for
any and all monies and claims for monies due or to become due under, or arising
out of, the Purchase Agreement in respect of the Aircraft, to the extent that
the same have been expressly assigned by this Assignment and for such period as
the Assignee may exercise rights with respect thereto under this Assignment, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute (or, if previously commenced,
assume control of) any proceedings and to obtain any recovery in connection
therewith that the Assignee may deem to be necessary or advisable with respect
to such monies and claims for monies.

          For all purposes of this Assignment, the Manufacturer shall not be
deemed to have knowledge of and need not recognize nor take any action with
respect to the occurrence of any Event of Default, the declaration of an Event
of Default, or the exercise of remedies set forth in Section 17

                                      -3-
<PAGE>

of the Lease by the Assignee, the discontinuance of any Event of Default or the
Aircraft's becoming no longer subject to the Lease or the Assignor's no longer
being entitled to possession of the Aircraft unless and until the Manufacturer
shall have received from the Assignee written notice thereof and the
Manufacturer may act with acquittance and conclusively rely upon any such
notice.

          4.   The Assignor agrees that at any time and from time to time, upon
the written request of the Assignee, the Assignor, at its own cost and expense,
will promptly and duly execute and deliver any and all such further instruments
and documents and take such further action as the Assignee may reasonably
request in order to obtain the full benefits of this Assignment and of the
rights and powers herein granted.

          5.   The Assignor does hereby represent and warrant that the Purchase
Agreement is in full force and effect as to the Assignor and is enforceable
against the Assignor in accordance with its terms.  The Assignor further
represents and warrants that it has, with the authorized execution of the
Consent and  Agreement, received all necessary consents to the assignment and
transfer contemplated herein.

          6.   The Assignor does hereby represent and warrant that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as this Assignment shall remain in effect, the whole or any part of the
rights hereby assigned or any of its rights with respect to the Aircraft under
the Purchase Agreement not assigned hereby, to anyone other than the Assignee.
The Assignor agrees that it will not enter into any agreement with the
Manufacturer that would materially and adversely affect the rights of the
parties under the Purchase Agreement insofar as it relates to the Aircraft or
waive any rights thereunder.

          7.   So long as the Aircraft is leased to the Assignor under the Lease
and unless an Event of Default shall have occurred and be continuing and the
Assignee or the Indenture Trustee (as assignee of the Assignee) shall have
commenced the exercise of remedies under Section 17 of the Lease, the Assignee
agrees that it will not enter into any agreement with the Manufacturer that
would amend, modify, rescind, cancel or terminate the Purchase Agreement insofar
as it relates to the Aircraft or waive any rights of Assignor thereunder without
the prior written consent of the Assignor.

          8.   This Assignment is executed by the Assignor and the Assignee
concurrently with the execution and delivery of the Lease.

          9.   This Assignment shall be binding upon and shall inure to the
benefit of the Assignor, the Assignee and their respective successors and
permitted assigns.

          10.  Neither this Assignment nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the parties hereto and consented to by the
Manufacturer.

                                      -4-
<PAGE>

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

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

          13.  Except as otherwise expressly provided herein, notice hereunder
may be given, and shall be deemed to have been given, as provided in Section
12.01 of the Participation Agreement.

          14.  First Union Trust Company, National Association is entering into
this Assignment solely as Owner Trustee under the Trust Agreement and not in its
individual capacity and neither First Union Trust Company, National Association
nor any entity acting as successor Owner Trustee or additional Owner Trustee
under the Trust Agreement shall be personally liable for, or for any loss in
respect of, any of the statements, representations, warranties, agreements or
obligations stated to be those of the Assignee hereunder, as to which all
interested parties shall look solely to the Trust Estate, except to the extent
expressly provided otherwise in the other Operative Agreements, provided
                                                                --------
however, that nothing in this Section 14 shall be construed to limit in scope or
-------
substance the liability of First Union Trust Company, National Association or
any entity acting as successor Owner Trustee or additional Owner Trustee under
the Trust Agreement in its individual capacity for the consequences of its own
willful misconduct or gross negligence or (in receiving, handling or remitting
funds) its simple negligence, or the inaccuracy or breach of its
representations, warranties or covenants made in such capacity in any other
Operative Agreements.

          15.  Pursuant to the Indenture, the Assignee has assigned and pledged
to the Indenture Trustee, as security for the Equipment Notes to be issued
thereunder, all of the Assignee's right, title and interest in and to the
Purchase Agreement under this Assignment.  The Assignor acknowledges and
consents to such assignment.

*                             *                              *

                                      -5-
<PAGE>

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

                              MIDWAY AIRLINES CORPORATION,
                              as Assignor

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

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

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

                                      -6-
<PAGE>

                                     ANNEX

                                BOMBARDIER INC.

             AIRCRAFT MANUFACTURER'S CONSENT AND AGREEMENT N588ML
             ----------------------------------------------------

          The undersigned, Bombardier Inc. ("Manufacturer"), hereby acknowledges
notice of and consents to the terms of the foregoing Purchase Agreement
Assignment N588ML (the "Assignment") dated as of September 21, 2000, between
MIDWAY AIRLINES CORPORATION, a Delaware corporation (the "Assignor") and FIRST
UNION TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, not
in its individual capacity but solely as Owner Trustee (the "Assignee").  The
capitalized terms used hereinafter being defined as such terms are defined in
the Assignment.  The Manufacturer hereby confirms to Assignor and Assignee that
(i) the Assignee shall not be liable for any of the obligations or duties of the
Assignor under the Purchase Agreement, nor shall the Assignment give rise to any
duties or obligations whatsoever on the part of the Assignee owing to the
Manufacturer except for the Assignee's agreement in the Assignment to the effect
that in exercising any rights under the Purchase Agreement with respect to the
Aircraft, or in making any claim with respect to the Aircraft or other things
(including data, documents, training and services) delivered or to be delivered
pursuant to the Purchase Agreement, the terms and conditions of the Purchase
Agreement shall apply to and be binding upon the Assignee to the same extent as
the Assignor; (ii) the Manufacturer consents to sale of the Aircraft by the
Seller to the As  signee; (iii) the Manufacturer consents to the lease of the
Aircraft by the Assignee to the Assignor under the Lease; (iv) the Manufacturer
consents to the mortgage of, and grant of a security interest in, all of the
Assignee's right, title and interest in and to the Aircraft and the Assignment
by the Assignee pursuant to the Indenture; (v) pursuant to and in accordance
with the provisions of the Purchase Agreement, the Manufacturer consents to the
assignment of Assignor's interest in the Purchase Agreement as it relates to the
Aircraft to Assignee pursuant to the Assignment; (vi) all representations,
warranties, indemnities and agreements of Manufacturer under the Purchase
Agreement with respect to the Aircraft shall inure to the benefit of Assignee to
the same extent as if originally named the "Buyer" therein, except as otherwise
provided in the Assignment; and (vii) during the Term the Manufacturer will
continue to pay all amounts and provide all goods and services to Assignor which
it may be required to pay or provide in respect of the Aircraft under the
Purchase Agreement unless and until the Manufacturer shall have then received
written notice in the manner specified in Section 3 of the Assignment from
Assignee that an Event of Default has occurred and is continuing and the
Assignee or the Indenture Trustee (as assignee of the Assignee) has commenced
the exercise of remedies set forth in Section 17 of the Lease, whereupon the
Manufacturer will pay such amounts or provide such goods and services directly
to the Assignee unless and until the Manufacturer shall have then received
written notice in the manner specified in Section 3 of the Assignment from
Assignee that no such Event of Default is continuing and remains unremedied,
whereupon the Manufacturer will pay such amounts or provide such goods and
services to Assignor.  Any notice to be delivered to the Manufacturer as
contemplated by the preceding sentence shall be addressed to the Manufacturer as
follows:
<PAGE>

          Bombardier Aerospace
          Regional Aircraft
          123 Garratt Boulevard
          Downsview Ontario M3K 1Y5
          Attention:  Director, Contracts Americas

          The Manufacturer hereby represents and warrants that: (i) the
Manufacturer is a corporation duly organized and existing in good standing under
the laws of Canada; (ii) the making and performance of the Purchase Agreement
and this Consent and Agreement have been duly authorized by all necessary
corporate action on the part of the Manufacturer, do not require any stockholder
or other approval, and do not contravene the Manufacturer's Certificate of
Incorporation or By-Laws or any indenture, credit agreement or other contractual
agreement to which the Manufacturer is a party or by which it is bound, and the
making of the Purchase Agreement and this Consent and Agreement does not
contravene, and to the best of the Manufacturer's knowledge, the Manufacturer's
performance of the Purchase Agreement and this Consent and Agreement does not
contravene any law binding on the Manufacturer; and (iii) each of the Purchase
Agreement and this Consent and Agreement constitutes a legal, valid and binding
obligation of the Manufacturer enforceable against the Manufacturer in
accordance with its respective terms, except that the enforceability of each may
be (a) limited by applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting the enforceability of creditors' rights
generally and (b) subject to the application of equitable principles and the
availability of equitable remedies.

          The Manufacturer's consent to the Assignment is subject to and
conditional upon the agreement of Assignor and Assignee that nothing in the
Assignment shall vary or modify the rights and obligations of the Manufacturer
under the Purchase Agreement and that all limitations or exclusions on liability
provisions under the Purchase Agreement for the benefit of the Manufacturer and
its Affiliates shall apply to Assignee and to the Assignor as if the Assignor
remained the Buyer under the Purchase Agreement.

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

*                             *                              *

                                      -2-
<PAGE>

          IN WITNESS WHEREOF, the Manufacturer has caused this Aircraft
Manufacturer's Consent and Agreement to be duly executed as of September 21,
2000.

                              BOMBARDIER INC.

                              By: ___________________________________________
                                  Name:
                                  Title:

                              By: ___________________________________________
                                  Name:
                                  Title:

                                      -3-<PAGE>

                             Note to Exhibit 10.21

            The following Engine Warranty Assignment is substantially identical
in all material respects to two additional Engine Warranty Assignments except as
follows:

--------------------------------------------------------------------------------
Aircraft (Tail No.)
--------------------------------------------------------------------------------
N588ML*
--------------------------------------------------------------------------------
N589ML
--------------------------------------------------------------------------------
N590ML
--------------------------------------------------------------------------------

----------
*Filed document
<PAGE>

                                                                   Exhibit 10.21

                          ENGINE WARRANTY ASSIGNMENT
                                    N588ML

                                    between

                          MIDWAY AIRLINES CORPORATION

                                      and

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

                                      and

                           GENERAL ELECTRIC COMPANY

                  ENGINE MANUFACTURER'S CONSENT AND AGREEMENT
<PAGE>

          THIS ENGINE WARRANTY ASSIGNMENT  N588ML (this "Assignment") is made
this 21/st/ day of September, 2000 between MIDWAY AIRLINES CORPORATION, a
Delaware corporation (the "Assignor") and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Owner Trustee (the "Assignee").

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

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

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

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

          IT IS HEREBY AGREED as follows:

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

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

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

          "Aircraft" means One Canadair Regional Jet Aircraft Model CL-600-2B19
           --------
bearing manufacturer's serial number 7368 including two General Electric CF34-
3B1 turbofan engines bearing manufacturer's serial numbers GE-E-872649 and GE-E-
872650 respectively (collectively the "Engines"), installed on such aircraft at
the time of delivery.

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

                                       2
<PAGE>

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

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

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

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

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

          "Lease" means the Lease Agreement  N588ML dated as of September 21,
           -----
2000 as the same may be amended, modified or supplemented, between the Assignee,
as lessor, and the As  signor, as lessee, providing for the lease of the
Aircraft.

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

          "Purchase Agreement Assignment" means the Purchase Agreement
           -----------------------------
Assignment N588ML dated as of September 21, 2000, between the Assignor and
Assignee as the same may be amended, modified or supplemented from time to time,
together with the Consent and Agreement thereto executed by the Manufacturer.

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

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

                                       3
<PAGE>

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

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

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

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

                                       4
<PAGE>

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

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

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

          3.01.  It is expressly agreed that, anything herein contained to the
contrary notwithstanding:  (a) on or prior to the Delivery Date for the
Aircraft, the Assignor will perform its obligations with respect to the Engines
to be performed by it on or before such Delivery Date, (b) the Assignor shall at
all times remain liable to the Engine Manufacturer under the terms and
conditions of the General Terms Agreement to perform all duties and obligations
of the Assignor thereunder to the same extent as if this Assignment had not been
executed, (c) the exercise by the Assignee of any of the rights assigned
hereunder shall not release the Assignor from any of its duties or obligations
to the Engine Manufacturer under the General Terms Agreement, except to the
extent that such exercise by the Assignee shall constitute performance of such
duties and obligations, (d) after the Delivery Date for the Aircraft, the
Assignor will exercise its rights and perform its obligations under the General
Terms Agreement in respect of the Engines to the extent that such rights and
obligations have not been assigned hereunder, and (e) none of the Indenture
Trustee, Owner Participant and Loan Participants nor, except as specifically
provided in Clause 3.2 with respect to the Assignee, the Assignee shall have any
obligation or liability under the General Terms Agreement by reason of or
arising out of this Assignment or be obligated to perform any of the obligations
or duties of the Assignor under the General Terms Agreement or to make any
payment or to make any inquiry as to the sufficiency of any payment received by
it or to present or file any claim or to take any other action to collect or
enforce any claim for any payment assigned hereunder.

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

                                       5
<PAGE>

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

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

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

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

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

          4.01.  The Assignor agrees that at any time and from time to time,
upon the written request of the Assignee, the Assignor, at its own cost and
expense, will promptly and duly execute and deliver any and all such further
instruments and documents and take such further action as the

                                       6
<PAGE>

Assignee may reasonably request in order to obtain the full benefits of this
Assignment and of the rights and powers herein granted.

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

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

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

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

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

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

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

                                       7
<PAGE>

Manufacturer reasonable opportunity, at the Engine Manufacturer's cost and
expense, to obtain a protective order or other reasonably satisfactory assurance
of confidential treatment for the information required to be disclosed, (c) to
the extent that the Assignee may have received a subpoena or other written
demand under color of legal right for such information, the Assignee may
disclose such information, but it shall first, as soon as practicable upon
receipt of such demand and to the extent permitted by applicable laws, furnish a
copy thereof to the Assignor and to the Engine Manufacturer, and the Assignee
shall afford the Assignor and the Engine Manufacturer reasonable opportunity, at
the moving person's cost and expense, to obtain a protective order or other
reasonably satisfactory assurance of confidential treatment for the information
required to be disclosed, and (d) the Assignee may disclose any such information
to any potential purchaser of the Aircraft and/or the Engine (subject to
execution by such prospective purchaser of a written confidentiality statement
setting forth the same or substantially similar terms as those referred to in
this paragraph).

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

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

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

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

                                       8
<PAGE>

          7.04.  Pursuant to the Indenture, dated as of September 21, 2000
between Assignee and Allfirst Bank, as Indenture Trustee (the "Indenture
Trustee"), the Assignee has assigned and pledged to the Indenture Trustee, as
security for the Equipment Notes to be issued thereunder with respect to the
Aircraft, all of the Assignee's right, title and interest in and to the
Warranties under this Assignment. The Assignor acknowledges and consents to such
assignment.

*                             *                              *

                                       9
<PAGE>

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

                                    MIDWAY AIRLINES CORPORATION,
                                    as Assignor

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

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

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

                                      10
<PAGE>

                                     ANNEX

                            GENERAL ELECTRIC COMPANY

              ENGINE MANUFACTURER'S CONSENT AND AGREEMENT  N588ML
              ---------------------------------------------------

          The undersigned, GENERAL ELECTRIC COMPANY, a New York corporation (the
"Engine Manufacturer"), hereby acknowledges notice of and consents to all of the
terms of the Engine Warranty Assignment  N588ML (herein called the "Assignment",
the defined terms therein being hereinafter used with the same meaning), dated
as of September 21, 2000, between MIDWAY AIRLINES CORPORATION, a Delaware
corporation, as Assignor and FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity but solely as Owner
Trustee, as Assignee, relating to the assignment by the Assignor of, its rights
and interests in the Warranties, and hereby confirms to the Assignee that:  (i)
all the Warranties given by the Engine Manufacturer under the CF34 Warranty
and/or the General Terms Agreement with respect to the Engines shall, subject to
the terms and conditions thereof and of the Assignment inure to the benefit of
the Assignee to the same extent as if the Assignee had originally been a party
thereto except as provided by Clause 2 of the Assignment; (ii) the Assignee
shall not be liable for any of the obligations or duties of the Assignor under
the General Terms Agreement in respect of the Engines, and the Assignment shall
not give rise to any duties or obligations whatsoever on the part of the
Assignee owing to the Engine Manufacturer, except for the Assignee's agreement
in the Assignment with respect to the Engines to the effect that, in exercising
any right in and to the Warranties, or in making any claim with respect thereto,
the applicable terms and conditions of the General Terms Agreement including
Article XIV (Limitation of Liability) shall apply to, and be binding upon, the
Assignee to the same extent as the Assignor, and with respect to such agreement
the Engine Manufacturer agrees that, anything contained in the General Terms
Agreement or the Assignment to the contrary notwithstanding, the Assignee shall
have no liability to the Engine Manufacturer for failure to comply with any of
the terms of the General Terms Agreement with respect to the Warranties while
under the Lease to the Assignor so long as the Assignee acts upon the written
instructions of the Assignor (to which instructions the undersigned understands
that it shall have access on request); provided, that no person other than the
Engine Manufacturer or any assignee of the Engine Manufacturer as permitted
under the General Terms Agreement shall have any rights against the Assignee
with respect to the undertaking and agreement set forth in this clause (ii);
(iii) the Engine Manufacturer consents to the execution of the Lease; (iv) the
Engine Manufacturer consents to the mortgage of, and grant of a security
interest in, all of the Assignee's right, title and interest in and to the
Warranties and the Assignment by the Assignee pursuant to the Indenture; (v) the
Engine Manufacturer agrees that the Assignment constitutes an agreement
permitted by the General Terms Agreement and pursuant to and in accordance with
the provisions of the General Terms Agreement, the Engine Manufacturer consents
to the assignment of Assignor's interest in and to the Warranties as and to the
extent that the same relate to the Engines and the

                                       1
<PAGE>

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

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

                                       2
<PAGE>

or liability to which it would not otherwise be subject under the General Terms
Agreement or modify in any respect the Engine Manufacturer's contract rights
thereunder or subject the Engine Manufacturer to any multiple or duplicative
obligation or liability under the General Terms Agreement.

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

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

*                             *                              *

                                       3
<PAGE>

          IN WITNESS WHEREOF, the Engine Manufacturer has caused this Engine
Manufacturer's Consent and Agreement to be duly executed as of September 21,
2000.

                         GENERAL ELECTRIC COMPANY

                         By:  ___________________________________________
                              Name:  Patricia A. Bowles
                              Title: Manager, Small Commercial Engine
                                     Contracts (attorney-in-fact)

                                       4

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