What's up at NWA?

[schmooze]

Hey, all. I was wondering how things are at Northwest since I haven't heard any news regarding them. Are things still pretty quiet as far as their furlough situation? Not looking for anything in particular, just wanted to see what they were up to.

 

[Beerme]

I believe things are on the upswing here at NWA. The company just announced a second reduction in furloughs to only 10 the end of this month. No further furloughs, with recalls expected Spring of next year.

 

[Pondscum]

That's good to hear!

 

[cargoflyr69]

how many does nwa have on furlough as of today? how long have they been away, and any predictions on how many will return or have found other employment?

 

[320AV8R]

Almost 1000, actual number about 983.....2 years......unknown......unknown.

 

[NWA-AirGuard]

Here's part of a message from our MEC meeting going on this week:

Next, Airline analyst Michael Boyd gave his opinions to the MEC about the
airline industry and NWA. He stated that less demand in the industry has
caused a 20 percent reduction in revenue. This change, combined with
low-cost carriers (cherry-pickers) and small-jet providers, has created a
new airline industry structure. In his opinion, no industry can absorb this
change without fundamental changes in the way they do business.

Boyd believes traffic will not return to 2000 levels until 2008, so NWA
needs to address these challenges by adjusting the cost/revenue mix. He
said the cost and fare pressure will continue for mainline carriers and it
is important for NWA and other majors to survive the next 12 to 18 months.
Boyd also said it is important for NWA to deliver a product that makes the
customer happy and builds brand loyalty to keep the first-class passengers
returning. It should be a goal of NWA to treat passengers as well as Jet
Blue and Southwest do.

Regarding fares, he said the pricing environment is too volatile for NWA to
raise prices. He indicated he believes it is unlikely NWA management is
trying to manipulate labor negotiations by keeping fares low, and in fact,
NWA has done a good job of maintaining high yields relative to their
industry peers.

Strengths for NWA, according to Boyd, include its alliance with CAL and
DAL, its limited exposure to low-fare carriers (currently) and its
international flying. He said the alliance is good for consumers and good
for NWA. Another strength for NWA is that it has been successful protecting
their brand and yields. All of these factors have helped NWA perform better
than its peers.

Boyd said the hub and spoke system does generate revenue and demand for
small jets (50-seaters) will flatten in the next decade. He said in 10
years, DTW will be one of the most important hubs because of its access to
Asia...specifically China. Boyd said NWA will be a dominant carrier because
of its access to Asia.

He said low-cost carriers are a threat because they cherry-pick the top
markets; they do not care about the “Flints” or “Akrons.” These low-cost
carriers have a unit cost advantage because of lower labor costs, lower
maintenance costs, and more competitive lease arrangements for their
equipment.

Boyd believes Pacific traffic will moderately rebound and NWA is better
postured than its peers. He also said the Atlantic markets are soft because
of excess capacity in those markets causing Northwest and other mainline
carriers to be “low-fare” providers.

There are 918 currently on furlough with 10 more to be furloughed on 10/31.

 

[MsFan]

Profit for Big Red

Northwest Airlines Reports Third Quarter 2003 Results

ST. PAUL, Minn., Oct 16, 2003 /PRNewswire-FirstCall via COMTEX/ -- Northwest Airlines Corporation (NWAC), the parent of Northwest Airlines, today reported a third quarter net profit of $42 million or $0.49 per common share. This compares to a third quarter 2002 net loss of $46 million or $0.55 per common share.

Richard Anderson, chief executive officer, said, "While it is encouraging to report a profit, the third quarter is traditionally strong for the industry due to greater demand in the summer months and in particular for Northwest because of its significant Pacific operation, which has an even greater summer demand peak."

Anderson continued, "These results do not signal an end to our challenges or diminish the need to address our cost structure in light of the changes in the revenue environment."

Financial Results

Operating revenues in the third quarter decreased 0.3% versus the third quarter of 2002 to $2.56 billion, driven by a decrease in passenger revenue of 1.1%, partially offset by an 8.9% improvement in cargo revenue. Passenger revenue per available seat mile improved 5.3% on 7.1% fewer available seat miles (ASMs).

Operating expenses decreased 5.7% versus a year ago to $2.41 billion. Unit costs excluding fuel increased by 1.0% on 7.1% fewer ASMs. During the quarter, fuel price averaged 76 cents per gallon, up 6.0% versus the third quarter of last year. This quarter's fuel expense included approximately $30 million, or six cents per gallon, of gains realized from hedging.

"While we are pleased to have contained unit cost growth in a period of significant capacity reduction, Northwest must still restructure its labor costs to compete more effectively in the current and future revenue environment," said Bernie Han, executive vice president and chief financial officer.

Northwest's quarter-end cash balance was $2.95 billion, of which $2.80 billion was unrestricted.

 

[Saabslime]

Anderson continued, "These results do not signal an end to our challenges or diminish the need to address our cost structure in light of the changes in the revenue environment."

Good 'ol Anderson. Never misses an opportunity does he.....

 

[JJJ]

Anderson is soo predictable.

NWA could make a profit for 2 years straight and he will still try and make things look bad. I believe the only reason that he is doing this is to try and milk some money from the unions. I've even heard that in the previous months that NWA has pre-paid leases on Airbus' just to show a loss.

I never thought that I would hear a company give excused as to why they made a profit. 2 quarters ago it was "..well, if we factor out the govt money, we would have lost money" Eventhough it was to reimburse the airlines for security related matters. This past month "..well the third quarter is always strong."

Northwest must still restructure its labor costs to compete more effectively in the current and future revenue environment

How do they know what the revenue environment will be like in the future?