Northwest Airlines (NWA) Announces Further Capacity Reductions; CEO Says Rising Oil Prices Offer Stronger Case to Merge

June 17, 2008 5:45 PM EDT

Northwest Airlines (NYSE: NWA) announced further capacity reductions for the fourth quarter of 2008 in response to the high cost of fuel.

Northwest will reduce its system mainline capacity (domestic and international) in the fourth quarter of 2008 by 8.5% - 9.5% versus the fourth quarter of 2007. This includes the reductions previously announced in April.

The airline has not yet finalized the specific employee impacts related to the reduced flying. However, for the resulting headcount reductions, NWA will first look to voluntary separation programs such as early-outs.

As a result of the reduced capacity, Northwest is removing a combination of 14 B757s and Airbus narrowbody aircraft from the fleet. In addition, the DC-9 fleet will be reduced from 94 aircraft at the start of 2008 to 61 aircraft by year-end. Northwest also accelerated the retirement of three freighter aircraft from its cargo operation.

“When we first contemplated a merger with Delta (NYSE: DAL), as oil was approaching $100 a barrel, we knew this was the right deal with the right partner. Now, with oil above $130 a barrel, the case for the merger, with its resulting synergies, is stronger than ever,� said CEO Doug Steenland.

Northwest Airlines Corporation (NWA Corp.) is the direct parent company of Northwest Airlines, Inc. (Northwest). Northwest is engaged in the business of transporting passengers and cargo.[SM]

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