Tue, Oct 03, 2006
Not Including Reorg Costs, Of Course
While gains in profits over the busy
summer travel season are expected to wane in the cooler months,
Northwest Airlines said Monday it still expects to post "a modest
profit" for 2006.
"Today's full-year projection is an indication that we are
making progress towards our goal of achieving long-term
profitability for the airline," Northwest CEO Doug Steenland
said.
In July and August, the carrier reported a combined $272 million
in revenue... but that profit does not include reorganization costs
at the bankrupt carrier, which in August alone amounted to a $943
million loss, according to the Detroit Free Press.
A court filing by Northwest said the loss is due to "the
company's implementation of new contract terms" with its unions. An
airline spokeman declined to say what those charges were.
Northwest recently implemented $745 million in cost cuts,
including pay cuts and benefit reductions reached with its pilots
and ground workers... and a new contract forced on flight
attendants after negotiations broke down.
The projected post-summer downturn in business may mean
Northwest will take in slightly less revenue for the year, compared
to 2005. Northwest expects to record $12 billion in revenue for
2006... down from the $12.3 billion posted in 2005.
That slight loss is offset by cost savings realized at Northwest
in the past year, however... and Steenland said the airline plans
to emerge from Chapter 11 bankruptcy by the middle of next
year.
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