Summary: Fourth Quarter 2005 vs. Fourth Quarter 2004

- Operating revenue increased 37.8% to $142.8 million

- Scheduled service revenue passenger miles increased 40.2% to

863.4 million on a 36.6% increase in capacity

- Operating loss of $14.0 million vs. $19.2 million

- Net loss of $13.8 million vs. $19.4 million

- A per-share loss of $0.79 (includes $0.06 in aircraft purchase deposit

write-offs) vs. loss of $1.11

- Higher fuel prices negatively impacted operating results by

$12.9 million, or $0.74 per share

MILWAUKEE, Jan. 26 /PRNewswire-FirstCall/ -- Midwest Air Group, Inc.

(Amex: MEH) today reported fourth quarter results for its Midwest Airlines and

Skyway Airlines (dba Midwest Connect) operations.

``The competitive environment and high fuel prices continued to challenge

us in the fourth quarter, as they have throughout a difficult year,`` said

Timothy E. Hoeksema, chairman and chief executive officer. ``Although

disappointing from an earnings perspective, the quarter included numerous

bright spots. We significantly increased revenue while lowering non-fuel

costs, posted impressive gains in market share, and ended the year in a strong

cash position.``

Comparing fourth quarter 2005 to fourth quarter 2004, operating revenue

increased 37.8% to $142.8 million. Operating results improved to a

$14.0 million loss from a $19.2 million loss in the fourth quarter of 2004,

while net results improved to a $13.8 million loss from a $19.4 million loss.

(Due to accumulated losses, Midwest Air Group discontinued recording federal

income tax benefit on losses beginning with second quarter 2004 and state

income tax benefit on losses beginning with second quarter 2005.) Per share

results were a loss of $0.79, compared with a $1.11 loss in the same quarter a

year earlier.

The revenue increase reflects a 40.2% increase in passenger traffic, due

to strong customer demand in response to strategic pricing actions and

schedule and service enhancements. A 1.2% increase in revenue yield was

driven primarily by the improving industry pricing environment. Total

operating expenses increased 27.6%, due to increases in fuel expense, station

costs and aircraft rental expenses. Fuel expense increased $23.4 million, or

75.7% -- of which $12.9 million ($0.74 per share) was related to price

increases (calculated by applying 2004 prices to actual gallons consumed in

2005 and comparing the result to actual 2005 expense). The company also

recorded $1.0 million ($0.06 per share) for the write-off of aircraft purchase

deposits. Fuel expense includes the effect of hedging, which favorably

impacted fuel costs by $2.1 million ($0.08 per gallon) in the quarter.

Midwest posted sizeable gains in market share in its Milwaukee and Kansas

City hubs in November, the most recent month for which market share results

are available:

-- Midwest Airlines and Midwest Connect carried 50.9% of all passengers

departing from Milwaukee during November, up from 41.2% in the same

month a year earlier. In November 2005, the airlines transported

145,376 Milwaukee passengers, up 34% from 108,588 passengers in

November 2004.

-- In Kansas City, Midwest market share rose to 8.9% for November from

5.2% in the same month a year earlier. In November 2005, Midwest

Airlines carried a total of 36,068 Kansas City passengers, up 71% from

21,123 passengers in November 2004.

For the year ended 2005, operating revenue increased 25.9% to

$523.0 million. Operating results fell to a $65.2 million loss from a

$45.3 million loss in 2004, while net results fell to a $64.9 million loss

from a $43.1 million loss last year. Included in the 2004 loss was a tax

benefit of $4.0 million. Results per share fell to a $3.71 loss from a $2.47

loss in 2004. Fuel expense increased $69.7 million, or 64.3% -- of which

$48.9 million ($2.79 per share) was related to price increases.

Year-end 2005 results include a $15.6 million ($0.89 per share) impairment

charge for the disposal of aircraft, $1.0 million ($0.06 per share) for the

write-off of aircraft purchase deposits and $0.8 million ($0.05 per share) for

the write-off of capitalized lease arranger and legal expenses, a $0.9 million

($0.05 per share) litigation settlement, and $0.7 million ($0.04 per share) in

severance costs. A change in the employee vacation policy reduced expense by

$1.9 million ($0.11 per share). Year-to-date 2004 results include

$1.2 million ($0.07 per share) of costs related to the disposition of

aircraft.

At Midwest Airlines, revenue per scheduled service available seat mile

increased 6.4% in the quarter. Load factor increased 1.3 percentage points

due to a 43.0% increase in passenger traffic on a 40.4% increase in capacity.

Revenue yield increased 4.1%. For the year, revenue per scheduled service

available seat mile increased 9.6%. Load factor increased 7.0 percentage

points due to a 36.0% increase in passenger traffic on a 22.6% increase in

capacity. Revenue yield decreased 1.9%.

Into-plane fuel prices increased 32.0% in fourth quarter 2005, averaging

$2.10 per gallon versus $1.59 per gallon in fourth quarter 2004, and resulted

in an $11.3 million (pre-tax) unfavorable price impact. Fuel consumption

increases resulted in a $9.9 million (pre-tax) unfavorable impact in the

quarter, primarily as a result of an increase in the number of operating

hours.

In the quarter, cost per available seat mile (unit costs) at Midwest

Airlines decreased $0.0079 to $0.1089, or 6.7% (excluding fuel, decreased

$0.0178 to $0.0696, or 20.4%) compared with fourth quarter 2004. Contributing

to the improvement in unit costs was a $1.4 million ($0.0012 per ASM)

reduction in expenses due to a change in the company vacation policy.

At Midwest Connect, revenue per scheduled service available seat mile

increased 14.1% in the quarter. Traffic increased 12.0% on a 2.8% increase in

capacity, resulting in a 5.3 percentage point improvement in load factor,

while revenue yield increased 4.8%. Cost per available seat mile increased

$0.0664 to $0.3060, or 27.7% (excluding fuel, increased $0.0504 to $0.2339, or

27.5%) compared with fourth quarter 2004, due primarily to labor costs

associated with new ramp and dining services functions performed for Midwest

Airlines; the transfer of ramp and dining services functions to Midwest

Connect has lowered the total cost to Midwest Air Group. The company recorded

$1.0 million ($0.0104 per ASM) for the write-off of aircraft purchase

deposits. A change in the company vacation policy reduced expenses by

$0.5 million ($0.0051 per ASM). Into-plane fuel prices increased 31.2% in

fourth quarter 2005, averaging $2.19 per gallon versus $1.67 per gallon in

fourth quarter 2004, resulting in a $1.7 million (pre-tax) unfavorable price

impact. Fuel consumption was virtually unchanged quarter over quarter.

Note: Cost per available seat mile excluding fuel expense is an industry

measurement that provides management and investors the ability to track

changes in cost absent fuel-related expenses.

The company ended the quarter with $99.0 million in unrestricted cash, up

from $76.2 million on September 30, 2005 and $81.5 million at December 31,

2004. The improvement in the company`s cash position was primarily due to the

signing of a multi-year contract amendment and extension with Juniper Bank,

the vendor of its Midwest Airlines MasterCard, which included a change in

payments from quarterly in arrears to annually in advance starting in December

2005. The company`s cash position also benefited from the overall improvement

in the airline industry environment in recent months, as well as its own

pricing and marketing initiatives. Capital spending -- net of credits used to

fund such spending -- resulted in a cash outlay of $9.2 million for the year

and consisted primarily of costs associated with the acquisition of additional

spare parts for the Boeing 717 fleet, purchase of an MD-80 engine, and

equipment and leasehold improvements for the in-house dining services program.

In the fourth quarter of 2005:

-- Midwest Airlines took delivery of two Boeing 717 aircraft, bringing the

total number of 717s in its fleet to 22. The airline will complete its

Boeing 717 fleet with the delivery of three additional 717s in the

first half of 2006. Midwest removed two older MD-81 aircraft from

scheduled service, one of which was sold in the quarter.

-- Midwest Airlines introduced new lower-priced roundtrip excursion fares

for travel on Signature, Saver Service and Midwest Connect flights.

The new fares require a 21-day advance purchase and a Friday- or

Saturday-night stay.

-- Midwest Airlines launched daily nonstop Signature Service between

Kansas City and Orlando, Pittsburgh, San Diego and Tampa, and increased

frequency on its popular service between Kansas City and Ft.

Lauderdale. Additionally, Midwest retimed many of its Kansas City

flights to make it more convenient for passengers connecting through

Kansas City to cities throughout the country. With the new service,

Midwest Airlines offers nonstop service from Kansas City to 12

destinations with 23 departures each weekday.

-- Midwest Airlines resumed its seasonal Milwaukee-Ft. Myers service,

which continues through April 30, 2006, and reinstated additional

seasonal frequency to other Florida cities earlier than in prior years.

-- Midwest Airlines completed the upgrade of equipment on its

Minneapolis/St. Paul flights from regional jets to new Boeing 717s to

respond to the growing customer demand. Minnesota passengers can now

enjoy the comfort of Midwest Airlines Signature Service from the newly

expanded Humphrey Terminal on five nonstop flights each weekday to

Milwaukee, where they can make quick connections to 40 destinations

nationwide.

-- The 2005 Zagat Air Travel Survey rated Midwest Airlines ``Top Domestic

Airline,`` marking the fifth time the airline has ranked #1. Midwest

has earned the top spot in every Zagat survey since its inception in

1990.

-- Midwest Airlines opened a dining services center in Kansas City,

supplementing its Milwaukee facility and enabling the airline to offer

its popular Best Care Cuisine to passengers on flights departing from

Kansas City. The facility also allows the airline to add its

digEplayer inflight entertainment system to longer flights in and out

of Kansas City.

-- Midwest Airlines enrolled the 2 millionth member in its Midwest Miles

frequent flyer program. Midwest Miles began in 1986 as the Midwest

Express Frequent Flyer program and is now a full-featured loyalty

program that provides members numerous ways to earn miles that can be

redeemed for free travel aboard Midwest, international travel aboard

participating airline partners, free car rentals and hotel stays, and

theme park tickets.

-- Midwest Airlines carried Milwaukee`s General Mitchell International

Airport`s 7 millionth passenger of 2005 -- the first time 7 million

passengers have used the airport in a single year.

-- Midwest Airlines received Federal Aviation Administration approval to

allow passengers to use portable oxygen concentrators. The airline is

one of only a few domestic carriers that permits onboard use of the

devices.

-- Skyway Airlines, which operates as Midwest Connect, developed an

Aviation Safety Action Program with the Federal Aviation Administration

and all of the airline`s eligible employee groups. The program

encourages voluntary, non-punitive reporting of safety concerns by

aviation employees to their employers.

In the first quarter of 2006:

-- On January 30, Midwest Airlines will expand its popular Premier Pet

Program to offer in-cabin travel to small dogs flying in airline-

approved carriers that fit below the seat. The frequent flyer program

awards pets one free roundtrip flight after flying with their owners on

three paid roundtrip flights or six paid one-way flights.

Additionally, members of the airline`s Midwest Miles program can earn

free trips for their pets by redeeming miles they have earned.

-- On February 12, Midwest Airlines will increase frequency in three

popular markets: Milwaukee-Boston, Milwaukee-Kansas City and Kansas

City-Orlando. In the two Milwaukee markets, the frequency increases

represent an early reinstatement of normal seasonal service resulting

from growing passenger demand.

``Throughout 2005, we made significant progress in our efforts to maximize

revenue through our total revenue strategy and to decrease costs through

companywide productivity improvements and better aircraft utilization,``

concluded Hoeksema. ``Moving forward, we believe we`re well positioned to take

advantage of the improving industry environment and leverage our efforts into

improved earnings performance.``

Midwest Airlines features jet service throughout the United States,

including Milwaukee`s most daily nonstop flights and best schedule to major

destinations. Skyway Airlines, Inc. -- its wholly owned subsidiary --

operates as Midwest Connect, which offers connections to Midwest Airlines as

well as point-to-point service between select markets on regional jet and

turboprop aircraft. Together, the airlines offer service to 47 cities,

including San Diego -- the airline`s newest destination. More information is

available at http://www.midwestairlines.com .

This document contains forward-looking statements that may state the

company`s or management`s intentions, hopes, beliefs, expectations or

predictions for the future. Words such as ``expect,`` ``anticipate,`` ``believe,``

``estimate,`` ``goal,`` ``objective`` or similar words are intended to identify

forward-looking statements. It is important to note that the company`s actual

results could differ materially from projected results due to the risk factors

described in the ``Risk Factors`` section of Part 1 of the company`s ``Annual

Report on Form 10-K`` for the year ended December 31, 2004 and the company`s

most recent Form 10-Q.

Editor`s note: Tables follow

MIDWEST AIR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended % Change

December 31, Better/

2005 2004 (Worse)

Operating revenues:

Passenger service $125,279 $88,271 41.9%

Cargo 1,831 1,528 19.8%

Other 15,656 13,833 13.2%

Total operating revenues 142,766 103,632 37.8%

Operating expenses:

Salaries, wages and benefits 37,240 36,483 (2.1%)

Aircraft fuel and oil 54,229 30,859 (75.7%)

Commissions 3,694 2,638 (40.0%)

Dining services 2,186 1,825 (19.8%)

Station rental, landing and other

fees 13,240 9,595 (38.0%)

Aircraft maintenance materials

and repairs 13,142 13,579 3.2%

Depreciation and amortization 3,646 4,230 13.8%

Aircraft rentals 13,872 10,833 (28.1%)

Impairment loss - - -

Other 15,473 12,773 (21.1%)

Total operating expenses 156,722 122,815 (27.6%)

Operating loss (13,956) (19,183) 27.2%

Other income (expense):

Interest income 1,016 641 58.4%

Interest expense (908) (924) 1.7%

Other, net 0 (5) 100.0%

Total other income (expense) 108 (288) 137.4%

Loss before income tax provision (13,848) (19,471) 28.9%

Income tax provision - (84) (100.0%)

Net loss $(13,848) $(19,387) 28.6%

Loss per common share - basic $(0.79) $(1.11) 28.8%

Loss per common share - diluted $(0.79) $(1.11) 28.8%

Weighted average shares - basic 17,553,323 17,467,989

Weighted average shares - diluted 17,553,323 17,467,989

MIDWEST AIR GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

Twelve Months Ended % Change

December 31, Better/

2005 2004 (Worse)

Operating revenues:

Passenger service $459,652 $354,201 29.8%

Cargo 6,323 5,001 26.4%

Other 57,014 56,044 1.7%

Total operating revenues 522,989 415,246 25.9%

Operating expenses:

Salaries, wages and benefits 147,010 142,747 (3.0%)

Aircraft fuel and oil 178,079 108,391 (64.3%)

Commissions 13,784 10,386 (32.7%)

Dining services 9,622 7,469 (28.8%)

Station rental, landing and other

fees 46,282 39,375 (17.5%)

Aircraft maintenance materials

and repairs 51,823 42,578 (21.7%)

Depreciation and amortization 16,001 17,309 7.6%

Aircraft rentals 51,468 40,323 (27.6%)

Impairment loss 15,622 - -

Other 58,466 51,920 (12.6%)

Total operating expenses 588,157 460,498 (27.7%)

Operating loss (65,168) (45,252) (44.0%)

Other (expense) income:

Interest income 3,723 1,874 98.6%

Interest expense (3,581) (3,793) 5.6%

Other, net 0 (14) 100.0%

Total other expense 142 (1,933) 107.3%

Loss before income tax credit (65,026) (47,185) (37.8%)

Income tax credit (140) (4,053) (96.5%)

Net loss $(64,886) $(43,132) (50.4%)

Loss per common share - basic $(3.71) $(2.47) (50.2%)

Loss per common share - diluted $(3.71) $(2.47) (50.2%)

Weighted average shares - basic 17,508,360 17,430,972

Weighted average shares - diluted 17,508,360 17,430,972

MIDWEST AIR GROUP, INC.

NON-GAAP FINANCIAL MEASURES

Three Months Ended Twelve Months Ended

December 31, December 31,

2005 2004 2005 2004

Midwest Airlines Operations

Total GAAP operating expenses

($000) $131,111 $101,714 $495,418 $382,236

ASMs (000) 1,203,466 870,823 4,417,682 3,685,372

CASM $0.1089 $0.1168 $0.1121 $0.1037

Total GAAP operating expenses

($000) $131,111 $101,714 $495,418 $382,236

Less: aircraft fuel ($000) $47,320 $25,611 $153,859 $91,315

Operating expenses excluding

fuel ($000) $83,791 $76,103 $341,559 $290,921

ASMs (000) 1,203,466 870,823 4,417,682 3,685,372

CASM excluding fuel $0.0696 $0.0874 $0.0773 $0.0789

Midwest Connect Operations

Total GAAP operating expenses

($000) $29,325 $22,409 $103,141 $83,355

ASMs (000) 95,823 93,530 382,251 362,785

CASM $0.3060 $0.2396 $0.2698 $0.2298

Total GAAP operating expenses

($000) $29,325 $22,409 $103,141 $83,355

Less: aircraft fuel ($000) $6,909 $5,248 $24,220 $17,076

Operating expenses excluding

fuel ($000) $22,416 $17,161 $78,921 $66,279

ASMs (000) 95,823 93,530 382,251 362,785

CASM excluding fuel $0.2339 $0.1835 $0.2065 $0.1827

Midwest Air Group

Total GAAP operating expenses

($000) $156,722 $122,815 $588,157 $460,498

ASMs (000) 1,299,289 964,353 4,799,932 4,048,157

CASM $0.1206 $0.1274 $0.1225 $0.1138

Total GAAP operating expenses

($000) $156,722 $122,815 $588,157 $460,498

Less: aircraft fuel ($000) $54,229 $30,859 $178,079 $108,391

Operating expenses excluding

fuel ($000) $102,493 $91,956 $410,078 $352,107

ASMs (000) 1,299,289 964,353 4,799,932 4,048,157

CASM excluding fuel $0.0789 $0.0954 $0.0854 $0.0870

Note: Numbers and totals in this table may not be recalculated due to

rounding.

MIDWEST AIR GROUP, INC.

OPERATING STATISTICS

Three Months Ended Twelve Months Ended

December 31, December 31,

2005 2004 2005 2004

Midwest Airlines Operations

Origin & Destination

Passengers 778,121 555,358 3,009,082 2,226,679

Revenue Passenger Miles

(000s) 802,119 561,104 3,121,785 2,296,252

Scheduled Service

Available Seat Miles

(000s) 1,185,368 844,449 4,358,678 3,554,656

Total Available Seat Miles

(000s) 1,203,466 870,823 4,417,682 3,685,372

Load Factor (%) 67.7 % 66.4 % 71.6 % 64.6 %

Revenue Yield $0.1279 $0.1228 $0.1193 $0.1216

Revenue per Scheduled

Service ASM (1) $0.0917 $0.0861 $0.0903 $0.0824

Total Cost per Total ASM $0.1089 $0.1168 $0.1121 $0.1037

Total Cost per Total ASM

(ex-fuel cost) (2) $0.0696 $0.0874 $0.0773 $0.0789

Average Passenger Trip

Length (miles) 1,031 1,010 1,038 1,031

Number of Flights 12,653 9,141 46,492 37,391

Into-plane Fuel Cost per

Gallon $2.12 $1.59 $1.85 $1.34

Full-time Equivalent

Employees at End of

Period 1,905 2,057 1,905 2,057

Aircraft in Service at End

of Period 34 30 34 30

Midwest Connect Operations

Origin & Destination

Passengers 200,273 178,204 820,487 680,233

Revenue Passenger Miles

(000s) 61,317 54,764 242,210 203,895

Scheduled Service

Available Seat Miles

(000s) 95,823 93,258 381,983 362,505

Total Available Seat Miles

(000s) 95,823 93,530 382,251 362,785

Load Factor (%) 64.0 % 58.7 % 63.4 % 56.2 %

Revenue Yield $0.3705 $0.3537 $0.3606 $0.3680

Revenue per Scheduled

Service ASM (1) $0.2433 $0.2132 $0.2346 $0.2125

Total Cost per Total ASM $0.3060 $0.2396 $0.2698 $0.2298

Total Cost per Total ASM

(ex-fuel cost) (2) $0.2339 $0.1835 $0.2065 $0.1827

Average Passenger Trip

Length (miles) 306 307 295 300

Number of Flights 14,510 14,522 59,550 56,599

Into-plane Fuel Cost per

Gallon $2.19 $1.67 $1.91 $1.40

Full-time Equivalent

Employees at End of

Period 1,001 774 1,001 774

Aircraft in Service at End

of Period 21 22 21 22

Midwest Air Group

Revenue Passenger Miles

(000s) 863,436 615,868 3,363,995 2,500,147

Scheduled Service

Available Seat Miles

(000s) 1,281,191 937,706 4,740,662 3,917,161

Total Available Seat Miles

(000s) 1,299,289 964,353 4,799,932 4,048,157

Load Factor (%) 67.4 % 65.7 % 71.0 % 63.8 %

Revenue Yield $0.1451 $0.1433 $0.1366 $0.1417

Revenue per Scheduled

Service ASM (1) $0.1030 $0.0988 $0.1019 $0.0945

Total Cost per Total ASM $0.1206 $0.1274 $0.1225 $0.1138

Total Cost per Total ASM

(ex-fuel cost) (2) $0.0789 $0.0954 $0.0854 $0.0870

Number of Flights 27,163 23,663 106,042 93,990

Into-plane Fuel Cost per

Gallon $2.13 $1.60 $1.86 $1.35

Full-time Equivalent

Employees at End of

Period 2,906 2,831 2,906 2,831

Aircraft in Service at End

of Period 55 52 55 52

(1) Passenger, cargo and other transport-related revenue divided by

scheduled service ASMs.

(2) Non-GAAP measurement.

Note: All statistics exclude charter operations except the following:

total available seat miles (``ASMs``), cost per total ASM, into-plane fuel

cost, number of employees and aircraft in service. Aircraft acquired but

not yet placed into service are excluded from the aircraft in service

statistics.

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