Nwa 1st Qtr. Losses

[Bigsky]

Associated Press
Northwest Loss Nearly Doubles on Fuel
Thursday April 21, 10:06 am ET
Northwest's 1Q Loss Nearly Doubles on Soaring Fuel Costs, Price Competition


EAGAN, Minn. (AP) -- Northwest Airlines Corp., parent of one of the nation's biggest air carriers, said Thursday its loss nearly doubled in the first quarter as price competition weakened revenue and soaring fuel costs continued to batter its results.

The company's loss swelled to $458 million, or $5.28 per share, for the January-March period from $230 million, or $2.67 per share, in the year-ago period. Excluding one-time charges, its adjusted loss was $440 million, or $5.07 per share, Northwest said.

That compares with the average estimate for a loss of $4.56 per share from analysts surveyed by Thomson Financial.

Operating revenue for the period totaled $2.8 billion, an increase of 8 percent from $2.6 billion and above the $2.73 billion in revenue targeted by Wall Street analysts.

In the latest quarter, passenger revenue grew 4 percent to $2.04 billion, Northwest said. Revenue passenger miles -- one passenger flown one mile -- jumped 8.8 percent to 18.17 billion, but the amount the airline earned per passenger per mile plunged 4.7 percent to 11.2 cents.

Overall capacity on Northwest flights expanded 4.3 percent to 22.77 billion available seat miles as plane occupancy, or load factor, grew to 79.8 percent from 76.5 percent.

Meanwhile, Northwest's regional carriers took in revenue of $276 million, up 27 percent from $217 million the year before.

Northwest's fuel costs surged 40 percent to $630 million from $450 million last year, the company said.

Northwest Airlines shares gained 18 cents, or 3.3 percent, to $5.58 in early trading on the Nasdaq Stock Market.

 

[North by Northwest]

Chapter 11 is on the horizon for the INDUSTRY if the fundamentals don't change i.e. fuel cost, over capacity, pricing/yields. NWA is still running a very tight ship in comparision with what it is facing. Temp. cost controls will be in place before the end of the year. We have a looong way to go before we walk the plank to the court for help.(http://www.marketwatch.com/tools/quotes/newsarticle.asp?siteid=yhoo&sid=10016&guid=%7BABBA059A%2D95E8%2D4131%2D91ED%2D4F0307142F2D%7D&symb=) This link gives a more precise picture of the quarter.

 

[Bigsky]

Thanks NXNW. A much better article. Who knows if AMFA, IAM and PFAA contribute as the pilots did and this new pension bill goes through, NWA may just have a good shot at avoiding Chap. 11.

 

[coolflyingfool]

It looks like fuel added $180 MM to the loss. That means that NWA spent an extra $2 MM a day in the 1st quarter on gas. Ouch! The rest of the loss only increased by about $58 MM, so that is just more than $600,000 a day. I think that loss can be slowed by one or two small fare bumps. Just my thoughts..........

 

[North by Northwest]

Unit costs excluding fuel increased by 1.3%(how low can it go). During the quarter, fuel averaged $1.38 per gallon, up 37.7% versus the first quarter of last year (who's fault is it for lack of hedging). During the quarter, Northwest undertook certain maintenance work that had been scheduled to be performed later this year (why do this during the slow season). Operating revenues in the first quarter increased by 7.5% versus the first quarter of 2004 to $2.8 billion ($200 million increase). This included an increase in passenger (with fewer employees) revenue of $72 million and an increase in cargo revenue of $23 million. Now, let's look at this analytically. The airline is running at it's most efficient ever. NWA has always enjoyed a cost advantage over most of it's rivals because of higher employee productivity (this MUST be put into dollar terms during discussions of concessions). Several issues that must be addressed prior to completing concessions. Why is it SW can create a fuel hedging program that allows it to weather the up tick in oil price and NWA didn't/ can't? Isn't that a management decision, or due to "non-competitive labor costs)? Why are the employees being ask to subsidize what appears to be a lack of managerial planning? Unit costs outside of fuel is almost flat yoy. Secondly, if NWA hands out a bonus to ANYONE...they can pretty much forget about concessions of anykind. This MUST be made clear in any agreement.

 

[lpbrian]

Looks like all that maintenance outsourcing is really paying off!!

 

[Kev3188]

NXNW--

Well put; couldn't agree more!

 

[lpbrian]

Thanks NXNW. A much better article. Who knows if AMFA, IAM and PFAA contribute as the pilots did and this new pension bill goes through, NWA may just have a good shot at avoiding Chap. 11.

[post="263642"][/post]​

I think AMFA has already "contributed"

 

[aafsc]

I think AMFA has already "contributed"

[post="263781"][/post]​

In Steenland's eyes, layoffs are not considered concessions, wage cuts are.

 

[Red Tail Bear]

I think AMFA has already "contributed"

[post="263781"][/post]​

Would you care to explain how AMFA has contributed.

 

[North by Northwest]

Hey Bear...that is one sleek lookin ship!

 

[Red Tail Bear]

Hey Bear...that is one sleek lookin ship!

[post="264070"][/post]​

Ive gotta agree with you there, especially if we're the U.S launch customer. Brand new state of the art A/C look really sharp with Red Tails.

 

[North by Northwest]

Northwest's fuel costs surged 40 percent to $630 million from $450 million last year, the company said. We have some serious issues to discuss here at NWA prior to concessions. One: since we are comparing pay and work rules to "other" carriers, my #1 question is WHY NWA Senior management is not held accountable for not hedging fuel in the same manner as SW. This failure seems to be "non-competitive" labor at the top. Perhaps we should consider that the market forces have changed and we need Sen. Management that has the ability to manage in the same manner that our pay competitors are managed (SW). Don't pick and choose comparisons...unless you can back up your own performance. Labor didn't fail to hedge properly (that's what those bonuses were for, labor didn't see any[HAS NEVER SEEN ANY]) . I see a tough sell here at NWA. :down: At least with bankruptcy we will forever rid NWA of Gary Wilson (holdings are wiped out in BK) (Checchi has sold his holdings, KLM was paid off years ago)and that gang of thieves that plundered and plundged NWA into financial disaster in the first place.

 

[Red Tail Bear]

Northwest's fuel costs surged 40 percent to $630 million from $450 million last year, the company said. We have some serious issues to discuss here at NWA prior to concessions. One: since we are comparing pay and work rules to "other" carriers, my #1 question is WHY NWA Senior management is not held accountable for not hedging fuel in the same manner as SW. This failure seems to be "non-competitive" labor at the top. Perhaps we should consider that the market forces have changed and we need Sen. Management that has the ability to manage in the same manner that our pay competitors are managed (SW). Don't pick and choose comparisons...unless you can back up your own performance. Labor didn't fail to hedge properly (that's what those bonuses were for, labor didn't see any[HAS NEVER SEEN ANY]) . I see a tough sell here at NWA. :down: At least with bankruptcy we will forever rid NWA of Gary Wilson (holdings are wiped out in BK) (Checchi has sold his holdings, KLM was paid off years ago)and that gang of thieves that plundered and plundged NWA into financial disaster in the first place.

[post="264163"][/post]​

Your right NxNW Sen. management should be held accountable. It was'nt labor who made poor decisions regarding fuel hedging. I also asked similar questions regarding this practice in a topic that I started a while back.(See Fuel Hedging-A smart practice) I still believe that this is a practice that NW should have been partaking in alot more than they seem to have been. Checci and Wilson F/U this airline bigtime, they were only in it for the $$. And now we're left to clean up the mess they left behind. :down: :down: :down:

 

[NewHampshire Black Bears]

Your right NxNW Sen. management should be held accountable. It was'nt labor who made poor decisions regarding fuel hedging. I also asked similar questions regarding this practice in a topic that I started a while back.(See Fuel Hedging-A smart practice) I still believe that this is a practice that NW should have been partaking in alot more than they seem to have been. Checci and Wilson F/U this airline bigtime, they were only in it for the $$. And now we're left to clean up the mess they left behind. :down: :down: :down:

[post="264290"][/post]​

+++++++++++++++++++++++++++++++++++++++++++++++++++

Good point RTB !!

Now BIG RED, AND the unions have to(AND WILL) make whatever changes to keep NW from BK (Simiiliar to AA)

NH/BB's