NW Feels Pinch

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chucky

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Sep 13, 2006
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Northwest feels pinch and works on Plan B
While a merger with Delta remains on hold, the airline is taking steps to survive on its own with $100-plus-a-barrel oil.


By LIZ FEDOR, Star Tribune


A new era of belt-tightening is beginning for Northwest Airlines, as its executives respond to abnormally high fuel costs and craft a future that in the short run isn't predicated on a merger.

The company's planned combination with Delta Air Lines was envisioned as a way to create a global airline that would be a long-term survivor in an intensely competitive industry. Their networks are compatible, with Northwest dominant in Asia and Delta strong in Europe.

But now that merger looks to be on indefinite hold, and with it the vision of building a larger company that could grow its way to greater profits while also being better insulated against cyclical downturns.

Now some analysts are forecasting that most major U.S. airlines will lose money this year, and additional cost savings are tougher to find because a number of carriers -- including Northwest and Delta -- already have restructured themselves in bankruptcy.

While Northwest has the ability to survive on its own, a number of analysts believe it remains a matter of time before a merger is again on the horizon.

And given Northwest's relative size -- No. 5 of the six largest U.S. carriers -- it remains more likely to be acquired than to be the buyer in a merger deal.

Story
 
Northwest feels pinch and works on Plan B
While a merger with Delta remains on hold, the airline is taking steps to survive on its own with $100-plus-a-barrel oil.


By LIZ FEDOR, Star Tribune


A new era of belt-tightening is beginning for Northwest Airlines, as its executives respond to abnormally high fuel costs and craft a future that in the short run isn't predicated on a merger.

The company's planned combination with Delta Air Lines was envisioned as a way to create a global airline that would be a long-term survivor in an intensely competitive industry. Their networks are compatible, with Northwest dominant in Asia and Delta strong in Europe.

But now that merger looks to be on indefinite hold, and with it the vision of building a larger company that could grow its way to greater profits while also being better insulated against cyclical downturns.

Now some analysts are forecasting that most major U.S. airlines will lose money this year, and additional cost savings are tougher to find because a number of carriers -- including Northwest and Delta -- already have restructured themselves in bankruptcy.

While Northwest has the ability to survive on its own, a number of analysts believe it remains a matter of time before a merger is again on the horizon.

And given Northwest's relative size -- No. 5 of the six largest U.S. carriers -- it remains more likely to be acquired than to be the buyer in a merger deal.

Story


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A Informative article "chucky"(about BIG RED), but since King "Richard" trumpeted that famous phrase...."STAY TUNED", it comes as no surprise for NW, or any of the other carriers not mentioned here.

I wonder whats worse,
Having a "mortgage" of brand new fuel efficient a/c, or Owning a FEET of planes, that are fuel inefficient ? (I refer to NW's DC/9's)
NW is well ahead of th curve, with Ejets and the Compass subsidiary.

Some things NW can do, as the ""oil vise" tightens ?
Get MORE Ejets(195's to be exact)

They could "mix and match"(LARGER Ejets)(195'S) a LOT in places like MKE/MEM/IND.

If/when the moment appears inevitable, that means it Must merge, do so with Co, and keep the NW name, culture.

I for one am not convinced that(say) airline # 3 AUTOMATICALLY means "survivor"(in a merge), while (say) companies like NW, or even Co, automaticlly mean..."the Acquired" !
 
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