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.

FMI: www.nwa.com