Northwest Airlines back in black

Northwest Airlines back in black

Northwest Airlines Corp. on Thursday reported a second quarter net profit of $227 million compared to a net loss of $93 million in the same period last year.

The results, however, included $387 million of unusual items. Without them, Northwest would have had a second quarter 2003 net loss of $160 million, making it the worst second quarter in company history, according to Richard Anderson, Northwest's chief executive.

Northwest's cargo revenue rose 2.8 percent to $181 million, despite a 6.3 percent drop in volume to 536 million ton-miles, a figure that reflects each ton of cargo flown one mile. Jim Friedel, president of NWA Cargo, the carrier's cargo subsidiary, attributed the decline in volume to a continuing drop in mail, as well as the loss of some freight.

The carrier's yield, or revenue per ton-mile, rose 9.6 percent to 33.76 cents. "We're making it on yield," Friedel said. "We're pretty happy with it."

The unusual items included a $209 million reimbursement of security fees from the U.S. government under the Emergency Wartime Supplemental Appropriations Act; a $199 million gain from the sale of Northwest's interest in Worldspan, and a $21 million charge related to the write-down of aircraft.

Anderson said the war in Iraq and the SARS crisis affected second-quarter results. "Moreover, we are still not seeing meaningful improvement in the underlying financial performance of the airline," he said.

"While we aggressively reduced capacity and parked aircraft in response to the Iraq war and SARS, the revenue environment, at best, is showing marginal improvement. Clearly, with losses of the magnitude that we are experiencing, our top priority remains to bring the company's costs in line with our new level of revenues."

Northwest had a $73 million operating loss, up from a $46 million loss in 2002. Operating revenues of $2.3 billion were 4.5 percent lower than a year ago.

Operating expenses fell 3.3 percent, primarily as a result of the lower capacity and cost reductions achieved.