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20 08 Issue No. 1


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A Conversation with Tim Hoeksema, chairman, president and chief executive officer, Midwest Airlines. pg. 36

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pilot A Conversation With... Tim Hoeksema

chairman, president and chief executive officer, midwest airlines


or the many loyal passengers of Milwaukee, Wisconsin-based Midwest Airlines, the carrier’s signature freshbaked chocolate chip cookies on board most flights are just one of the special amenities they’ve come to enjoy and appreciate. Beyond the aroma and taste of homemade cookies as well as the spacious, comfortable all-leather seating with extra legroom and exceptional personal attention, it’s the tireless contributions of more than 2,000 talented, dedicated employees that has earned this 24-year-old airline the reputation of “The best care in the air.” What started in 1948 as a corporate shuttle for Kimberly-Clark’s executives traveling from its headquarters to company mills, Midwest Express Airlines in 1983 brought the customized corporate jets to the traveling public. The carrier, which operates a fleet of McDonnell Douglas MD-80 and Boeing 717 aircraft, changed its name to Midwest Airlines five years ago. On Jan. 31, the carrier became privately owned when it was acquired by TPG Capital. As part of the acquisition, Northwest Airlines will be a passive investor with a 47 percent stake. Midwest Airlines’ executives view the acquisition as a positive change — one that will help it continue down a successful path. What’s the recipe for the airline’s success? Its executive team and employees alike work together to bring only the best traveling experience to its guests. They are aligned in their thinking, and everyone who represents Midwest Airlines has a keen understanding that the most important ingredient to a successful operation is happy, satisfied customers. And from an executive perspective, the airline’s leaders know that the only way to take good care of their guests is to take equal care of their employees.

No one believes more in the power of employees than the airline’s chairman, president and chief executive officer, Tim Hoeksema, who has led the airline for twoand-a-half decades. His philosophy is simple — hire wonderful employees who focus on delivering the best care in the air. In 1969, Hoeksema, who aspired to become a pilot since the tender age of 6, joined Kimberly-Clark as a first officer in the company’s air transportation operations, and in 1974, he was appointed chief pilot. Three years later, he became the director of air transportation for Kimberly-Clark Corp. and president of K-C Aviation. He was named president of Midwest Express Airlines in 1983, and he was appointed president of Kimberly-Clark’s transportation sector in 1988. Hoeksema began his aviation career in 1968 as a flight instructor for the University of Illinois at Urbana-Champaign. He graduated summa cum laude from Western Michigan University in 1972 with a bachelor’s of science in aviation engineering technology. In 1977, on a Kimberly-Clark scholarship to the University of Chicago Executive Program, he obtained a master’s degree in business administration. In a recent interview with Ascend magazine, Hoeksema shared his views on running a successful airline. Question: How important is it to keep up the reputation of “The best care in the air”? How does it keep your customers coming back? And how does it fend off the competition? Answer: I think it’s very important that we maintain a strong focus on delivering “The best care in the air.” We’re 24 years old. We’ve grown significantly in that period. We’ve been recognized many times as the Photos courtesy of Midwest Airlines

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profile What do you want from a customer service representative? What do you want from a reservations agent? We wrote those things down, translated them and shared them with our employees. Every month we measure how we’re doing against what our customers say they want. We share that throughout our offices. There are boards all around. If you walk down the reservations center, there’s a big board that tells how reservations did last month in every one of the categories that customers said were important and how we’re doing as a company in a composite score. That’s all 50 stations across the country. Pilots and flight attendants all get rated by several thousand customers a month. We share that information. We talk about it. If it drops, we talk about how we’re going to get back on track. We have constant communication. Hiring people who have that intrinsic value of caring about others and the type of values that we have as a company has been very important.

Midwest Airlines’ spacious, all-leather two-by-two seats provide passengers added comfort, one of the carrier’s most attractive amenities that keep many loyal customers coming back.

best U.S. airline. The thing that’s important to us is not the external recognition; it’s really the customer loyalty that we have built up over the years. Our people are focused on doing that. I’ve shared many times that the best article I’ve ever read was entitled Differentiate or Die. If you look at running a company, it seems to me that you have to be a little different, have to have something special whether you’re making potato chips, building widgets or flying people on airplanes. You want to have a product that people want to choose. People want to come to you for some reason because it’s special, different, unique or better. We’ve tried to do all those things. It’s extremely important to our continued success that we continue to differentiate our product and continue to have a product that people want to choose, and they do. That has really been the secret to our growth and success. It’s about wonderful employees all focused on delivering “The best care in the air.” For us, it’s extremely important. It’s who we are. We hire people who line up with our core values and who are really centered around delivering “The best care in the air.” Q: How do you motivate your employees and get them to deliver day after day after day? 38 ascend

A: Probably the best way to do that in the long run is to hire quality people, hire people who care, hire people who are oriented toward caring about others and delivering the best type of service, and communicating with those people regularly on how important it is, on how we’re doing and how our customers respond. When we get recognized by Travel and Leisure or Zagat’s, we share that internally. We say thanks to our people. We share how important it is. We don’t dwell on it because you can pat yourself on the back to the point that you take your eye off the ball and lose focus on quality. That’s very important; so we communicate constantly to our employees. Q: How do you know your methods are effective and employees are delivering exactly what your customers want and expect? A: We do monthly measurements. We measure several thousand passengers a month in terms of how we’re doing at delivering the service they want. A number of years ago we asked them several key questions: What do you want? What do you want from flight times?

Q: Do you think learning the specific services your customers have requested plays in their minds when making a decision which airline to fly so that it becomes less of a discussion of just price and more of a desire to fly Midwest Airlines? A: Absolutely. It’s very important. I was in Kansas City earlier in 2007, and I spoke to several hundred people during a luncheon. They asked me to talk about the softer side of business rather than the hard dollars. I talked about quality, value, our core values as a company, how we translate that and all those types of things. Afterward, a lady came up and said, “I just want you to know that those things you call the ‘softer side’ translate into hard, cold cash. I can prove it. I fly once a week to New York. I fly you all the time, period.” She went on the say, “Could I shop around and find lower fares? Probably, maybe, possibly, but I don’t because you take such good care of me. I just fly you.” I think it does translate into loyalty. It does translate into people saying, “You’re my airline. My kids are always going to go to school in places that you serve.” I think the ultimate goal of everybody is to try and develop that type of loyalty so people will continue to come back and frequent your product or, in our case, frequent our service. Q: The two-by-two seating and chocolate chip cookies are probably the most visible aspects. Are there any other particular things that you feel are the differentiators that factor in with that customer loyalty? A: It’s the entire experience. When you go on vacation somewhere or you fly an airline, you really rate the experience. If you call for reservations, you have a sense of how you were treated. Certainly cookies are

profile something we talk about. Cookies are good, particularly ours. To us, it’s a symbol. It’s a symbol of warmth. One of our goals in our core values that I referenced was service to the customer. We say, in part, that we want to treat customers as if they were a guest in our own home. On our planes, chocolate chip cookies really relate to how we care about you, how we feel about you and how we treat you. It’s much more than something that’s good to eat. It’s really symbolic of what we think is very important. The cookie is probably the best known. We’ve had a lot of fun with it, and it is good. It’s really a symbol of the entire experience that we try and provide. Of course, two-by-two seating has been very successful. It’s another one of the things people look for … extra space. I will tell you over the years, early on, we had shrimp scampi, beef Wellington, complimentary wine and champagne. It’s easy to say, “That’s why we got high ratings.” All that had to go away after Sept. 11. We now have a buy-on-board program that’s from external restaurants. The interesting thing is that our scores, in terms of how our customers feel about it, have proven that it’s more reflective of the service our people provide as opposed to the things we used to offer. Maybe the most significant measure was the Best U.S. Airline Award we received from Travel and Leisure the first year after we discontinued complimentary wine, champagne, beef Wellington and shrimp scampi. Then it was truly our people. It really is about the experience of how people treat you, how they care about you and how they interact with you. Those are the things I think are important; so maintaining that type of culture is extremely important at Midwest Airlines.

our MD-80s. We’re changing both so our customers (after August) will have the choice on any of our airplanes of Signature or Saver. We started with taking the Saver airplanes (the MD-80s) and adding 12 Signature seats to those airplanes to give a choice. It is going extremely well. It has been very well received. The US$65 fee that we charge for that has been very well accepted. People like the choice. We’ll offer that choice on the 717 as well when we change the configuration and actually add 11 seats to it. We’ll have 40 Signature seats in two-by-two and 59 Saver seats on our 717s. People will have a choice. We’ll be able to carry more passengers. We’ll have more leg room in the Signature sections. I think it’s really going to be a win-win. Q: Do you think it will change anybody’s perception of the airline? Will they see that as an added service? A: As you look at various products, certainly the airline industry is trying to move to a situation where there are more alternatives, more choices. As you survey customers, choice is important. Variation is important. Having additional seats on the 717s will make some people happy because there’ll be more options at some of the lower-fare levels. We have some routes

that are full now. I think more people will be able to fly on us. I think that will make them happy. If you’re paying a normal business fare, a refundable-type business fare, there will be no additional charge for the Signature service on the 717. There will be more leg room, so I think they will be happy. That’s why I think it is a win-win. We’ll continue to look for more opportunities to give people choices. Q: How do you project that the full implementation of your one-cabin business model with both Signature and Saver seating will influence your profitability and customer experience? A: I think it’s going to be significant. It’ll enhance our revenue because we’ll have 11 more seats on every 717. We have 25 717s. That’s about a 12.5 percent increase in available seat miles just on that fleet. It will enhance our revenue with virtually no cost. The plane is flying anyway. It’ll be able to carry 11 more passengers. There’ll be some incremental revenue on a Signature seat before discount tickets that people buy. It will enhance our revenue in that area as well. I think it will be significant in terms of enhancing our revenue and profitability with virtually no cost. It’ll be significant in

Q: The cookies have been so well received that you began selling them locally after several customer requests for the recipe. Do you have any intention of selling them nationwide? A: We’ll just take it a step at a time. We began selling them at [Milwaukee] Brewers [baseball] and [Milwaukee] Bucks [basketball] games in 2006. That’s gone over very well, so now we’re selling them in a small chain of grocery stores in the Milwaukee area and another in Kansas City. We’ll see how it goes. I think it’s been fun for our loyal passengers to be able to buy some and bake them at home, especially when they’re so easy to bake. No thoughts right now on expanding that beyond here. Q: You recently introduced the Signature and Saver seating choices. How has the response been to that new seating configuration? A: We’ve had Signature [two-by-two] seating on our 717s historically. Since 2003, we’ve had Saver [two-by-three] seating only in

Midwest Airlines’ fresh-baked chocolate chip cookies aren’t just a big hit in flight. The carrier sells its signature cookies to select grocery stores in Milwaukee and Kansas City.

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profile offering more customers their choice. In some cases it’s the difference in the choice to fly us, which they want to do, or flying someone else that they don’t want to. In some cases, flying two-by-two versus two-by-three, I think it will be very positive all the way around. We’ve very excited about it. We would have it in place right now if it weren’t for the technology. That’s why it’s so important for us to work with Sabre [Airline Solutions® ] in partnership to make this happen. We’re excited about it, and things seem to be moving along very well in terms of that phase of our technology. We’re unique in doing this in one cabin. We’re not making this two cabins. We’re making it one cabin. There are corporations that say their people can’t fly business class or first class. We’re looking at this as a one-cabin product with a choice of Saver or Signature. That’s why the work Sabre [Airline Solutions] is doing here is so important to this airline.

back and retool some of our service offerings to the consumers. We’ve focused on cost. We have reduced our non-fuel costs, our cost per available seat mile, by more than 32 percent in the last five years. We’ve done a lot to control non-fuel-related costs, but at the same time, we’ve focused on doing it in a way that would not harm the onboard experience. I think by and large, we’ve done a very good job of that. In terms of fuel, it’s the single highest cost element in the industry right now. We’re a tiny little carrier, and one penny a gallon to us is US$1.3 million a year. It’s a very significant cost. In January 2007, we hedged 90 percent of our fuel for 2007 at about US$58 a barrel. Now it’s up to more than US$100 a barrel. That’s an increase of about a dollar a gallon. It’s a huge cost, and we’ve done several things to offset it. In the bigger picture over the longer haul, even when things were really tough after Sept. 11, we totally transitioned our fleet from DC-9s to 717s. The 717 is about 23 percent to 24 percent more fuel efficient than the DC-9 it replaced. The best hedge we could do was that. That’s really an on-run hedge for increasing fuel costs. We’re looking now at replacing our MD-80s with a more fuel-efficient airplane. That’s really the best long-term hedge that you can do, and it’s very, very important. On a short-term basis, you try and do everything you can. During the last couple

years, we’ve done everything everybody else has. We’ve taxied out and in on one engine. You reduce the amount of water you carry. You don’t fill up the water; you take just what you need for that flight. You reduce certain services; we haven’t taken pillows and blankets off because we think that’s important to our customers. You try and reduce weight onboard the airplane as much as you can in terms of pushcarts and such. You fly careful flight patterns and become as fuel efficient as possible. As we move into the year, the industry is looking at reducing some capacity. Late last year, there were a fair amount of announcements in terms of capacity reduction for this year. We’re going to see reduced domestic capacity this year versus last given what’s going on. At US$2.80 per gallon of jet fuel, there are markets that were just marginally profitable before that have become unprofitable. We’re also looking at reducing some service that we had planned. We’ll still have some growth, but it won’t be quite the size of growth we had planned on. We’re in the middle of going through those assessments right now. It is a tough industry. We have about 25 percent of the first half of 2008 hedged at an average of US$73.44 a barrel. We’ve been hedging right along but hedges in the long run just smooth out the peaks and valleys. You’re going to pay over the long haul what you’re going to pay. That’s why more fuel efficient airplanes and things like that are very important. There have been some fare increases in the last several months. It’s not enough to totally cover the cost of fuel, otherwise you’re going to affect ridership too much. There’s that balance between how much the industry can push fares up and not affect ridership. The economy isn’t going to be robust this year. It’ll be OK but not robust. We’re looking at a 1 percent to 2 percent GDP growth movement in 2008, down from 2007. Hopefully, it will stay there and not get any worse. Most of the companies in this area feel that this is going to be a good year. They’re going to be hiring. They’re going to be flying more instead of less. I think we’re in the right sector of business with our focus on business travel. As oil prices and fares go up, the first group affected will be leisure, discretionary travelers. They’re paying more money for putting gas in their cars and heating their homes. I think the leisure traveler gets affected first when fuel prices go up. The businesses I talked to, at least 80 percent of them, where I’ve personally done my own survey in the Milwaukee area, say they’re going to have


Q: How have you managed your operations differently to maintain profitability and offset fuel costs? A: Very good question. Very pertinent with what’s going on right now in this very difficult industry. If we back up, prior to Sept. 11, we had 14 consecutive years of profitability. Midwest and Southwest Airlines are the only jet carriers in the United States that can say that. Sept. 11 really changed everything, and it’s been very difficult. We have had to go

More than 2,000 dedicated Midwest Airlines employees focus on delivering exceptional products and services to customers, which has earned the airline the reputation of providing “The best care in the air.”

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profile more business travel this year. I think that’s certainly encouraging. Q: When faced with circumstances like US$100 a barrel oil, is it always a cost part of the equation or do you look at additional revenue streams like selling cookies? A: We’re always looking at revenue opportunities. Until we’re ready to do them, we typically wouldn’t announce them. Selling cookies isn’t big dollars, but it’s going to be meaningful dollars in this year, surprisingly enough. We’ve looked for opportunities like that to do things differently. Q: It’s not just a pure cost focus; you look at both sides of the equation? A: Absolutely. You have to look at both sides of the equation and balance both from a fare point of view. You say, “I’d like to push fares up a lot, but I can’t because it will negatively impact my revenue.” But you have to push the fares up some. Fortunately for us, I think we’re positioned in the best part of the market going forward with a focus on business travel. You see other carriers that have been real leisure focused moving a little bit more toward business focus now because I think that’s where travel will be least affected this year. Q: What is your feeling about what the recent acquisition by TPG will bring to the airline and how it will impact Midwest Airlines? A: TPG has an outstanding reputation. They’ve been the biggest private equity player in the airline space. They’re very smart airline people. First, I would say that TPG’s interest in us to start with and their eventual offer to acquire us says good things about our business plan. It says good things about our people. It says good things about our strategy. They were very pleased when they came and looked at us. They plan on us continuing to do the things we’ve been doing. We’ll continue as Midwest Airlines, continue to grow and continue to provide “The best care in the air.” From a customer point of view, I don’t see things changing. From a pure business point of view, we won’t be doing some of the things that take a lot of time, energy, effort and money that don’t contribute to running the business. We will continue to do all the things that a public company would do, but we won’t do an audit of the audit of SarbanesOxley. We’ll only do an audit of that, and so we’ll save money. Also, with Northwest as a passive minority investor, there are some synergy opportunities that we’ll have with Northwest in terms of purchasing of hull and liability insurance and fuel and things like that. There will be some good opportunities for some cost savings through working with them in

some areas. We’re happy about TPG. They are quality people. They really know this business. Our experience with them to date has been terrific. They’re honorable people with everything on the table. They’re straight shooters. Q: What kind of feedback have you gotten from your employees about the acquisition? A: Very positive. We had a press conference on a Thursday night at 11:15 p.m., and the media with all the TV cameras were hanging around here after the board meeting. We announced it. Everybody in the community was very happy. Our employees were very happy. It was a very positive day when we announced that.

Q: Are environmental concerns something that are on your radar screen, or are they more of a European issue? A: I will tell you that it is here. It’s not going to be here, it is here. Maybe Europe is a little ahead of us, but it’s very important that anyone running any company in this country today be very cognizant of environmental concerns. We’ve been doing things for a long time to the extent that we could. One of them I mentioned was the transition from DC-9 to 717. We have reduced fuel burn and have quieter airplanes now than we used to. That’s an important step. You have taxiing on one engine. We’re doing those types of things. We recycle. We probably do as much or more recycling than anybody. We’ve reclaimed


If we had the next-generation technology in terms of air traffic control, we’d be able to handle more traffic than we do now way more efficiently and save lots of fuel.

Q: Are there any other advantages to being privately held? A: We were privately held for the first 11 years of our life and then public for the next 12. Now we’ll go through a period of being private again. We try not to be so short-term focused as a public company. There’s this tendency to go from quarter to quarter, trying to make every quarter better. There were times when we got on quarterly conference calls after our quarterly results/ earnings and told the investors that this is not a good short-term investment. We think it’s a good long-term investment, so we’re doing it. When we announced that we were ordering 25 Boeing 717s in the middle of very difficult economic times for us and the industry, we said it’s probably not a good short-term decision, but it’s a very good market decision. It turns out that it’s a very, very good long-term decision. We try not to be influenced by the short term. From a private equity point of view, you have a little longer-term horizon. You don’t live quarter to quarter. We’ll be able to share financial data more openly with our employees on a month-to-month basis. I think there will be some advantages … strong potential capital behind us for things that are good. We’re very pleased with the TPG partnership.

deicing fluid here in the Milwaukee airport in partnership with the county. We’ve replaced some of our gas-powered carts with electric ones. We’re looking ahead at carbon emission credits. We’re very much involved in that as is the industry. Q: Do you feel that the aviation industry is unfairly singled out when it comes to environmental concerns such as carbon emissions? A: Certainly I think when you look at the percentage of contribution that the industry makes, we probably get more press than we should. That’s probably true about a lot of things in this industry. It’s easy to talk about aviation. Everybody’s somewhat involved in it because everybody flies. In the same light, it’s important that we do our part as an industry. I can tell you that it’s not only us; all airlines are pretty cognizant of this. We’re really doing everything we can. When you look at the amount of power that you need to get out of a jet engine and keep the weight really light, there are probably fewer options for converting to other power sources than for an automobile. You can put a heavy battery in an automobile and it’s not going to bother you. You can’t put a heavy battery in an airplane that’s going to fly you across

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Midwest Airlines’ one-cabin business model will include 11 additional seats on its Boeing 717 aircraft, a 12.5 percent increase in available seat miles. The ability to carry extra passengers on every flight can enhance revenues substantially.

the Atlantic Ocean. You can’t really use nuclear up there. There are a lot of limitations from a weight restriction perspective and things like that. If the auto industry did a lot of switching and moved away from fossil fuel, I would think there would be some availability for the airline industry, a lot more availability. There’s coal liquefaction that is being looked at and tested now by the military. They’re flying jet engines with coal that has been liquefied into product to use for jet fuel. There’s a lot of things like that

of environment-conscious things. I think we’ll be right out there, right along with everybody doing everything we can within the constraints that I talked about. Q: How important do you view technology in the operations of your airline? A: Technology in the airline industry is key to everything. As an airline, we are totally dependent on technology in every aspect and every phase. You look at the airplanes and the technology and advancements that have

“... we want to treat customers as if they were a guest in our own home.” — Tim Hoeksema, chairman, president and CEO, Midwest Airlines

going on. There are a lot of coal reserves in this country. There are clean processes for translating that into gasoline. I think there are options. Those options are being worked on very vigorously, and the airline industry is involved. We’re all working along those lines and being as environmentally conscious as we can. Q: Are you optimistic that the airline industry will be a leader in environmental issues? A: Absolutely. You’re already starting to see the airline industry talk about this in terms 42 ascend

happened in airplane cockpits over the years. It allows us to fly more fuel-efficient routes and to fly more fuel efficiently. I think one of the most important technology applications hasn’t happened and needs to happen. That is air traffic control. We have an ATC system that is operating on 1950s technology. That is literally true. That has to change. If that changes, you’ll see a much more efficient, better-run air traffic control system. What does that do? It reduces delays. It allows more airplanes to fly in the airspace. It saves fuel like you couldn’t imagine. There’s an effort that needs to happen in terms

of being environmentally conscious and saving fuel. It’s the air traffic control system. We need the next-generation system. There’s a lot of talk about it in Congress right now. There are bills that are in various stages of advancement that have to happen to help this air traffic control system come of age, if you will. That would be huge. If we had the next-generation technology in terms of air traffic control, we’d be able to handle more traffic than we do now way more efficiently and save lots of fuel. If there’s anything needed in terms of technology, it’s really updating the air traffic control system in this country. That would be huge. Q: What’s it going to take to make that happen? A: It’s going to happen. It’s a matter of how quickly. It’s a matter of getting the new FAA authorization bill approved in Congress right now that has that provision in there. The industry is working on that. It’s on the go. We’re hoping it will get approved this year. The old 10-year authorization expired in September. It’s been extended. That has to happen soon, and hopefully it will happen early this year. Q: Where do you see Midwest Airlines in five years? A: Continuing to grow. Continuing to have a differentiated product. Continuing to deliver ”The best care in the air.” We’ll continue to grow a little bit more in Kansas City and look for other focus cities similar to Milwaukee and Kansas City that will allow us to provide our service to those types of cities. Hopefully we’ll be flying a lot more passengers and serving a lot more chocolate chip cookies. a


Meet the Pilot Q: What is your home town? A: Born and raised in Berwyn, Illinois, a Chicago suburb. I’m a converted [Green Bay] Packers fan. I used to hate the Packers years ago, but I’ve lived in Wisconsin 38 years. That’s over half my life. You can’t live in Wisconsin 38 years without being converted to a Packers fan. Q: What is your educational background? A: I have a bachelor’s degree from Western Michigan University and a master’s in business administration from the University of Chicago. Q: What are your main hobbies? A: I have a Harley. That’s more of a passion. I had my first Harley 43 years ago. It was a little Harley 175. I wish I still had it today. It would really be worth something today. They don’t make little bikes like that anymore. I had it for about a year, year and a half and sold it. I didn’t get a big bike until probably 10 or 12 years ago, something like that. It’s a lot of fun. I really enjoy getting out. Harleys are quality. They’re hometown. They started here [in Milwaukee] over 100 years ago. I have a 100th Anniversary Ultra Classic, which is from 2003. In 2003, Harley had a big celebration and a big shindig in town. It was a lot of fun. I like to golf and fish. That’s about it. Q: How many years have you been in the airline industry? A: Twenty-four years. Q: What attracted you to the airline industry? A: That’s a good question. There’s something about this that gets in your blood. The people who leave it come back. I wanted to fly ever since I can remember. We lived in the Chicago area; planes going overhead. I started flying when I was 16. I got my private license on my 17th birthday, commercial when I was 18. I went away and got an AP mechanic’s license and advanced flight ratings and instructed at the University of Illinois. I started as a pilot for Kimberly-Clark Corp. on Oct. 1, 1969, over 38 years ago. I was a first officer, then captain and then chief pilot, corporate flight operation. I then ran something called K-C Aviation with custom interior modifications, heavy maintenance on corporate jets literally from all over the world.

I ran that business. I started with Midwest Airlines, which was owned by Kimberly-Clark for the first 11 years of our life. I was running about five business units for Kimberly-Clark at the time and starting an airline was one of them. I moved to Milwaukee about 19-and-a-half years ago because I was running Midwest Airlines directly and had other people running these other businesses. When we split 12 years ago, I went with the airline instead of staying with Kimberly-Clark. I’ve always wanted to fly. Q: Who is your biggest influence? A: I don’t know if there’s any particular person. I think we’re all a product of people that we’ve been exposed to. We become a little bit of a lot of those people. I have a very strong faith. I would say my faith and beliefs have been a big influence on my life at how you approach things and how you approach people. I look at our core values as a company in terms of service to the customer and mutual respect and responsiveness, honesty, and integrity. I think those are all values that one can say have basis in one’s belief system and have a basis of faith. The Bible talks about good servants and putting in a fair day’s work for a fair day’s pay. It talks about respect for people and caring about other people, honesty, and integrity. It says a lot about that. We’re all influenced by many people, by families and by our belief system. As I look over the years, I talked with [former Southwest Airlines CEO] Herb Kelleher several years before I actually started this airline. To see a guy there who has a passion for what he’s doing, who cares about people, who has really differentiated themselves in a little different way than we have … in many ways I would say that even though we maybe serve a little different spectrums of the marketplace, they more leisure and us more business, our cultures are more alike than any other two airlines. I think we’re all influenced by many, many people over time. Some in a positive way, and some in a negative way. That’s how we learn and get molded. Q: What is your favorite thing about running an airline? A: That’s an easy, easy question. I look back over the last 23 years. There is no question that the thing that I feel best about and am happiest about is seeing some of our people who have come in at entry level positions and have grown personally and professionally. Now

they’re running chunks of our business. To see them blossom and see them grow and develop … there’s no better feeling. The industry has had its ups and downs over the last 23-and-ahalf years, but to see people who have really grown and moved up in terms of where their capabilities are, there’s no better feeling. Q: Who do you admire most? A: That’s kind of relating to the influence question. There are lots of people in the business world that you look and say, “Boy, they’ve done a great job.” I think I admire people that have a passion for something and the wherewithal to carry it out. If you looked at Herb, I think Herb’s done that well. He’s had a passion for people and a passion for service and being a little different. I think he’s done a terrific job out there. Q: What is the best advice you’ve ever received? A: Probably not best to get into the airline business … no, not really! Q: If you weren’t running an airline, what would you be doing? A: If I weren’t running an airline, I’d probably be a pilot for an airline. a

Tim Hoeksema, Midwest Airlines chairman, president and CEO

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