Northwest posts profit in first half

Northwest Airlines reported a $50 million profit and revenues of more than $6 billion for the first six months of the year.

The airline said that during the seasonally strong summer months of July and August, Northwest reported a profit of $272 million.

Fulll statement:

Northwest Airlines provided the following earnings outlook for 2006. The numbers referenced in this news release are pre-tax figures, excluding reorganization items.

  —As previously reported, for the first six months of the year, Northwest
    reported a $50 million profit, excluding reorganization items, on
    revenues of more than $6 billion.
  —During the seasonally strong summer months of July and August,
    Northwest reported a profit of $272 million, excluding reorganization
    items, on $2.4 billion in revenues.
  —Since September, Northwest has experienced a softening in revenue,
    similar to trends reported by other carriers.
  —For the months of September through December, Northwest anticipates
    that it will realize a loss for this period, excluding reorganization
    items.
  —For full year 2006, based on the airline’s current fuel and revenue
    estimates, Northwest is forecasting a modest profit with an estimated
    pre-tax margin of approximately two percent, excluding reorganization
    items, on more than $12 billion in revenue.

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“This expected modest full year profit is testament to the success of our ongoing restructuring efforts and the substantial sacrifices made by our employees and other Northwest stakeholders,” said Doug Steenland, Northwest president and chief executive officer.

“The full year profit outlook is also partially reflective of Northwest’s reduced capacity. For full year 2006, we expect that our systemwide consolidated available seat miles will be approximately eight percent lower than 2005.”

Steenland continued, “While a full year profit would be an important accomplishment in the restructuring efforts at Northwest and would help us continue to attract necessary capital, we still have work to do to meet our long-term pre-tax margin goal of six to seven percent, which will allow Northwest to compete successfully in the future and acquire and finance new aircraft.”

“Reversing $4.2 billion in losses since early 2001 is not an easy task, but one that is essential to the future of Northwest. We realize that a number of key stakeholders, especially our employees, have made difficult and painful sacrifices to help the airline reach this juncture in its restructuring process.”

Steenland added, “A key element of our restructuring plan that has been addressed through collaboration with our employees is the preservation of our defined benefit pension plans. By working with Northwest union leaders, employees and Congress, we were able to help bring about new pension funding rules that allow Northwest to provide the pension benefits that our employees have justly earned.”

“Today’s full-year projection is an indication that we are making progress towards our goal of achieving long-term profitability for the airline. By achieving profitability, our employees will share in Northwest’s success through job and retirement security and gain sharing opportunities that we have put in place for our employees.”

“Because of continuing progress in addressing our restructuring goals of resizing and optimizing the Northwest fleet and level of flying; realizing competitive labor and non-labor costs; and restructuring and recapitalizing the airline’s balance sheet, we remain focused on emerging from Chapter 11 protection by the middle of next year,” Steenland concluded.
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