On Thursday the nation’s 5th largest air carrier was cleared for take off and its shares began trading again on the NYSE for the first time since its 20-month reorganization began. The event marked what ought to be the last vestige of the wave of airline bankruptcies after 9/11.
According to government figures, in 2005 Northwest’s cost structure was higher than that of every airline except U.S. Airways. But by the end of its reorganization in 2006, its costs were lower than those of U.S. Airways, Delta, and Continental; though still higher than rivals American and United. This week NWA said that as a result of the restructuring it had slashed its debt by $4.2 billion and its annual fleet costs by $400 million, trimmed down its unprofitable routes, and cut $1.4 billion in annual labor costs. Said a NWA spokesperson
Today is a landmark in the history of Northwest Airlines. We’ve repositioned the company as a strong, globally focused airline with a great route network, a revitalized fleet, a competitive cost structure, and a recapitalized balance sheet.
NWA has the oldest operating fleet of planes and will upgrade over the next 2 years, including becoming the first North American carrier to buy the Boeing 787 Dreamliner, as well as 72 new regional jets. One advantage Northwest will have is that its new labor contracts lock workers into lower pay rates and more company-friendly work rules through the end of 2011, longer than any of its U.S. competitors.