NWA says it will cut flights, ground planes

[737 Pylt]

http://twincities.bizjournals.com/twincities/stories/2008/03/31/daily38.html?ana=yfcpc

NWA says it will cut flights, ground planes

Northwest Airlines Corp. said Thursday that it would reduce its domestic flight schedule later this year and cut its fleet by 15 to 20 planes as a result of rising oil prices.
The moves, in addition with recent steps such adding fuel surcharges and reducing the number of bags that may be checked at no charge, are intended to help offset the rising price of oil.
"Over the past several months, the price of oil has risen dramatically to all time highs and there is no reasonable basis to conclude that oil prices will materially decline anytime soon," said CEO Douglas Steenland. "These increased costs are significant and call for a strong response from us."
The airline also said that it will reduce non-aircraft capital expenditures for 2008 by approximately $100 million and seek to improve profits by $100 million annually through cost reductions, productivity improvements and revenue enhancement.

As a previous poster stated, this boom was over before it even started!
737

 

[Jimmy C. Corn]

Man, one piece of bad news after another this week.

 

[~~~^~~~]

Superpilot92:

This is what I was making reference to a couple of days ago. Most of these airplanes will be DC9's.

 

[On Your Six]

Watch the hardball tactics beginning. Does not surprise me. Two reasons:

1. Economic (DC9s are gas guzzlers)
2. Steeland really wants to upgrade his lake home and he needs that merger bonus that expires in June

 

[GOULET!]

I'd be shocked if they would park anything but DC-9s.

 

[FmrFreightDog]

I'd be shocked if they would park anything but DC-9s.

10 DC-9s, the rest a mix of 319/320/757 as per the press release.

 

[Superpilot92]

Superpilot92:

This is what I was making reference to a couple of days ago. Most of these airplanes will be DC9's.

Does anyone have any info on whether these are the reductions that were already planned for? If they reduce more then it will probably be the dc9 30's. Who knows, i just fly them

 

[johnsonrod]

Tough time for everyone and I wish you all luck! MSP based airlines feeling the pinch.

 

[Redmeat]

Does anyone have any info on whether these are the reductions that were already planned for? If they reduce more then it will probably be the dc9 30's. Who knows, i just fly them

The reductions are planned for after the "busy summer season"

That is a lifetime in this business.

I wouldn't be surprised if this is part of the post merger reduction plan.

 

[~~~^~~~]

Super92,

My understanding is that these are additional and this number is smaller than the number I heard NWA came to the table with. It is likely a highly dynamic situation.

Hopefully NWA is still so understaffed from the bankruptcy staffing levels that getting the fleet adjusted will not result in any surplus staffing.

Furloughs at either airline right after folks got hired, suck.

Delta's still going to run another 100 or so new hires through May, I hope

As others have pointed out, September is off in the distance, things could change for the better.

 

[Superpilot92]

The reductions are planned for after the "busy summer season"

That is a lifetime in this business.

I wouldn't be surprised if this is part of the post merger reduction plan.

I agree. Setting up for the integration. We will see.

 

[737 Pylt]

I agree. Setting up for the integration. We will see.

This may have been why both sides were unable to come to an agreement.
Now we may not have a choice. Its time to get onboard or be left behind!

737

 

[~~~^~~~]

Just found this... sounds like NWA still training through June. No furloughs mentioned. This sounds better.

II. CAPACITY REDUCTIONS

Schedule Reductions

In September, after peak summer travel concludes, Northwest will reduce its scheduled domestic system capacity by approximately five percent versus the 2008 business plan. Full-year domestic available seat miles (ASMs) are expected to be flat to down slightly versus 2007.

Northwest is continuing to expand its international service with the addition of new flights between Detroit and London Heathrow; Minneapolis/St. Paul and London Heathrow; Seattle and London Heathrow; Minneapolis/St. Paul and Paris; Portland, Ore. and Amsterdam; and Dallas/Ft. Worth and Amsterdam, which will be operated by Northwest's joint venture partner, KLM Royal Dutch Airlines. Northwest will review whether any changes to the international schedule are needed after the peak summer travel season.

Fleet Reductions

As a result of the five percent domestic capacity reduction from planned levels, Northwest will remove an additional 15 to 20 aircraft from service. Two DC-9s will be removed in June and the remainder in the fall to coincide with the planned schedule reductions. These fleet reductions will include approximately 10 DC-9s and the balance being a mix of Boeing 757s and Airbus A320s and A319s.

III. LIQUIDITY ENHANCEMENTS

Northwest Airlines currently has the strongest liquidity position among U.S. network carriers and is committed to maintaining its industry-leading cash position. As of Dec. 31, 2007, Northwest's unrestricted cash on hand was $3 billion which equaled 24 percent of revenues for the full year.

"Challenging economic times require smart, but difficult, decisions by the management team," said Steenland. "We are pro-actively making those decisions now to maximize our liquidity position."

Capital Expenditures

Northwest is reducing non-aircraft capital expenditures for 2008 by approximately $100 million. The airline now intends to invest approximately $150 million in non-aircraft capital expenditures in 2008.

Improved Profit and Loss Statement

The airline will also seek to realize profit improvements of $100 million on an annual basis through cost reductions, productivity improvements and revenue enhancements. To the extent that the schedule changes will result in the need for fewer employees, every effort will be made to achieve these reductions through attrition.

With the reduced flying, Northwest has suspended its plans to hire additional pilots and flight attendants. The last training classes for both groups conclude in June.

 

[123]

Does anyone have any info on whether these are the reductions that were already planned for? If they reduce more then it will probably be the dc9 30's. Who knows, i just fly them

The reductions are in addition to the 2008 fleet plan.

 

[Occam's Razor]

2 "big lease" A320's, and 1 B757-200 due for heavy check. Another B757-200 put on "light duty" (as a system spare) to delay required heavy check.

DC-9's were originally slated to be parked at Cycle limit, but will most likely result in a loss of 25-30 DC-9 Captain positions system-wide through use of Variable Cap.