Northwest Airlines is no longer operating under federal bankruptcy protection.The nation’s fifth-largest carrier’s, Michigan’s largest air carrier emergence from Chapter Eleven caps a 20-month reorganization aimed at making it competitive for years to come.
Northwest is a now definitely a leaner and more efficient airline. The carrier shaved $2.2 billion in annual operating costs with the help of bankruptcy court. That belt-tightening will make the airline one of the most profitable in North America, industry officials predicted.
Northwest had lost nearly $4 billion when the carrier filed for Chapter 11 bankruptcy protection on Sept. 14, 2005. The losses were attributed to the Sept. 11 terrorist attacks, the Sudden Acute Respiratory Syndrome (SARS) outbreak in Asia, rising fuel costs and low-cost carriers forcing Northwest to lower its ticket prices to retain customers.
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.
Most major airlines have trimmed unprofitable routes and fly fuller planes on the routes that are left. Workers took pay cuts at the bankrupt carriers as well as American Airlines, which narrowly avoided bankruptcy in 2003.
Source: The independant
