Northwest Airlines Reports Fourth Quarter

Northwest Airlines Corporation , the parent of Northwest Airlines, today
said it realized a net loss of $129 million or $1.49 per common share for
its fourth quarter, excluding unusual gains. This compares to the fourth
quarter of 2002, when Northwest reported a net loss of $178 million or
$2.08 per common share, excluding unusual items.

Northwest reported a full-year net loss of $565 million or $6.57 per
common share, excluding unusual items. This compares to a net loss of $488
million or $5.71 per common share in 2002, excluding unusual items.

For the fourth quarter, Northwest reported net income of $363 million or
$4.18 per common share, including unusual gains. This compares to a fourth
quarter 2002 net loss of $488 million or $5.68 per common share, including
unusual items.
For the full year 2003, Northwest reported net income of $236 million or
$2.74 per common share, including unusual gains. This compares to a full
year 2002 net loss of $798 million, or $9.32 per common share, including
unusual items.
In the fourth quarter of 2003, Northwest realized $492 million of unusual
gains resulting from the following non-recurring transactions: the
completion of an initial public offering (IPO) of Pinnacle Airlines Corp.,
which generated a gain of $299 million; the sale of Northwest`s holdings
in Hotwire, the partial sale of its stock holdings in Orbitz, and the
completion of a debt exchange, which together resulted in a net $45
million gain; and a transaction pertaining to Northwest debt secured by
foreign real property, which resulted in a non-cash gain of $148 million.

For the full year, Northwest realized unusual gains of $801 million. In
addition to the $492 million of fourth quarter unusual gains, Northwest
realized unusual gains earlier in the fiscal year, including the sale of
Northwest`s interest in Worldspan and the benefits from federal
legislation suspending certain security fees and taxes.

Richard Anderson, chief executive officer, said, “Like the other network
airlines, we are reporting our third consecutive year of massive losses
from airline operations. During the past three years, Northwest has
experienced pre-tax losses totaling nearly $2.2 billion from airline
operations. This financial performance is clearly not sustainable.


“Since 2001, Northwest has pursued virtually all non-labor cost reduction
opportunities. We have completed eight rounds of cost reductions,
resulting in $1.6 billion in savings. As a result, Northwest has reduced
non-labor costs to a very competitive level against all airlines in the
industry. Northwest`s non-labor CASM (cost per available seat mile) is
lower than all of the major airlines and several of the low cost carriers.
Unfortunately, this is not enough. For Northwest to succeed, we must now
reduce our labor costs to competitive levels.”

Anderson continued, “The airline business has fundamentally changed and we
must bring our costs in line with our revenue expectations. Relying on the
possibility of a cyclical recovery is futile. Relying on the sale of
assets and other one-time transactions is also not the answer. The airline
must produce profits from operations to succeed over the long term. In
2003, Northwest benefited from the sale of assets that were not critical
to the airline`s operation and these transactions were sufficient to
offset the large loss that the carrier suffered. However, by definition,
these transactions are one-time events.

“While the 2003 financial results generated by the airline were
unacceptable, Northwest did succeed in a number of other areas. Thanks to
the hard work of our 39,000 employees, we ran one of the best operations
in the industry as evidenced by Department of Transportation (DOT)
performance statistics. We also further increased our significant unit
revenue premium to the industry.”

Looking to the future, Anderson said, “With restructured labor costs,
Northwest has the core assets to be a profitable and successful network
carrier—a strong route system supplemented by world-class alliances, a
flexible fleet strategy including our fleet modernization program, and
state- of-the-art airline technology which makes our customers` travel
experience efficient and convenient.”

Regarding the achievement of competitive labor costs, Douglas Steenland,
president, said, “We have been meeting regularly with our union leaders to
share financial information and discuss the challenges facing Northwest.
Contracts for the Air Line Pilots Association (ALPA) and the International
Association of Machinists and Aerospace Workers (IAM) became amendable in
2003 and we are engaged in negotiations with ALPA and the IAM, pursuant to
the U.S. Railway Labor Act, with the goal of realizing competitive labor
Steenland added, “Northwest employees, labor leaders, management, and the
board of directors have worked together effectively in the past to meet
industry challenges and are now committed to working together to stop the
losses and ensure the company`s long term success.”

Bernie Han, executive vice president and chief financial officer, added,
“As evidenced by Northwest`s one-time transactions in 2003, we believe
Northwest has been a careful steward of its capital and has prudently
managed its investments in aircraft, non-aircraft assets and ventures.
Through the disposition of most of its non-core investments and the timely
accessing of the capital markets, Northwest was able to end 2003 with the
highest, size- adjusted liquidity among the network carriers.”