No Matter What, Sam, Don't Look Down

Investor extraordinaire Sam Zell, a.k.a. the Grave Dancer, has made a fortune reviving good companies with bad balance sheets, such as drugstore chain Revco. But what if the problem isn't just financial? Like, say, an airline.

Zell's investment fund, Zell/Chilmark, announced on July 25 that it is buying 90% of troubled Midway Airlines for $25 million. With the industry losing money and tough competition from such other low-cost carriers as Southwest Airlines, he has a problem that financial revamping alone can't fix. "Zell is about to learn his lesson," says consultant Michael Boyd.

But Zell figures on winning over folks who like the reduced hassle at Chicago's smaller, close-in Midway Airport. From there, his five-plane airline flies to destinations that Southwest shuns: Denver, New York's La-

Guardia, and Washington's National.

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