Midwest Air Group, parent of Midwest Airlines and Skyway Airlines, continued to show progress on its bottom line, reporting an $8.7 million loss for the first quarter, lowered from a $15.9 million deficit in the year-ago period.

"Many of the positive trends we reported in 2005, including strong revenue performance and improvement in nonfuel costs, continued in the first quarter of this year. While earnings are historically weak in the first quarter and fuel prices remain extremely high, being able to consistently grow revenue and reduce costs is certainly encouraging," Chairman and CEO Timothy Hoeksema said.

Revenues climbed 34.6% to $150.7 million owing to increased traffic and higher yields, while expenses rose 25.1% to $160 million. Operating loss narrowed from $15.9 million to $9.3 million even as fuel costs increased 50% to $52.8 million and the company saw just $100,000 in cost benefits from hedging during the quarter.

Group traffic grew 25% to 944.3 million RPMs as Midwest Airlines took delivery of two 717s and boosted frequency on popular Milwaukee-Boston, Milwaukee-Kansas City and Kansas City-Orlando routes. Capacity climbed 21.2% to 1.32 billion ASMs, lifting load factor 2.1 points to 71.5%. Yield rose 8.8% to 13.9 cents and scheduled service RASM jumped 12.9% to 10.51 cents. Unit cost was up 3.1% to 11.87 cents but fell 4.7% to 7.95 cents excluding fuel.

Midwest reported "sizable gains" in market share at its Milwaukee and Kansas City hubs and will be adding frequencies from both in the current quarter. "We're encouraged by the continuing improvement in the industry environment, as well as strong advanced bookings for travel on Midwest. We expect our earnings to reflect these positive changes as we move into the busy summer travel season, though of course, fuel prices continue to be a concern," Hoeksema said.