NWA 1st QTR Financial Results

ex-dc9drvr

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A little info on NWA's 1st QTR financial results:

"Northwest Airlines Corp.

The Eagan, Minn.-based carrier reported a first-quarter loss of $171 million, enough to beat the lowered expectations of Wall Street analysts.

Northwest's loss of $2.01 per share for the first three months of 2002, was slightly better than the loss of $2.05 per share a year earlier, when the fourth-largest carrier also reported a net loss of $171 million. Last year's quarter included $48 million in nonrecurring charges.

Analysts surveyed by Thomson Financial/First Call expected a loss of $2.46. Northwest shares were down 16 cents at $19.89 at the end of regular trading Thursday on the Nasdaq Stock Market.

Richard Anderson, Northwest's chief executive said he was encouraged that Northwest generated a profit in March, due partly to the early Easter holiday, but said current economic conditions are still unfavorable.

``We believe the best way to manage the airline in the near term is to remain fiscally disciplined by continuing to control costs and by adding capacity only when economically justified,'' Anderson said.

That could mean delaying delivery on some narrow-body jets Northwest is scheduled to take delivery on in 2003, said Mickey Foret, executive vice president and chief financial officer.

Foret also said Northwest expects to save about $100 million annually as a result of its decision to stop paying base commissions to travel agents for tickets issued in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. Those commissions ended March 10.

Northwest, along with most other major airlines, cut back operations by about 20 percent following the Sept. 11 terrorist attacks. Passenger capacity is now down only about 13 percent from a year earlier, but Northwest is flying with only 76 percent of the reduced number of seats filled.

The airline said revenue from higher-paying business travelers hasn't rebounded because of the slowed economy and the effects of Sept. 11 on air travel in general.

Northwest's first-quarter operating revenues totaled $2.18 billion, down 16.5 percent from $2.61 billion a year earlier."


Not what I was truly hoping for.
ex-dc9drvr, i.e., furloughed DC9 Driver
 

Rock

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Which part didn't you like? They did better than any of the other major airlines. Only SWA posted a profit.
 

ex-dc9drvr

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I guess the part I did not like was this:

>>``We believe the best way to manage the airline in the near term is to remain fiscally disciplined by continuing to control costs and by adding capacity only when economically justified,'' Anderson said.

That could mean delaying delivery on some narrow-body jets Northwest is scheduled to take delivery on in 2003, said Mickey Foret, executive vice president and chief financial officer. <<


Which means to me, and this is just my opinion - no inside info, NWA management will delay as long as they possibly can before any pilot recalls will take place. Management will take advantage of this situation as long as possible until they just physically can't do it any longer.

Just a small side note - before the TWA merger, American had about 11,500 pilots on the property - give or take a few hundred. How many pilots were furloughed at American: 595. NWA had 6615 pilots on the seniority list and furloughed 490 pilots.

Today, NWA still has 490 pilots on the street and American, not including TWA pilots, has only 386 on the street. Yeah, the 208 recently recalled by American were recalled due to seniority issues with the merged seniority list and not increased demand as American management has tried to portray. But they will receiving an AMR paycheck as of 1 May.

I guess my point is - the numbers just do not add up. American has nearly twice the pilots and over 20% less on furlough. Who is taking advantage of the situation?

NWA also has the highest load factor in the industry right now and the most money in the bank - over $2.5 billion. Just my opinion!
 

Rock

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Thanks for the reply. Just a thought, but I wonder if Pan Am, TWA, Branif, US Air, maybe United were ever accused of acting conservatively. As much as it hurts in the short run, I wonder if it isn't better to be furloughed for an extra year (if it is that long) then bought out 15 years into your airline career. I'm not looking for an argument...just tossing out a thought.
 

pb4ufly

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Some good points.

In comparision, UAL has 844 of 10,411 on furlough.

"United still has at least $2.8 billion in cash and a fleet of new aircraft that give it at least some financial flexibility. "
 

MsFan

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While I have to agree that it sucks that it appears management will drag its feet on recalls as much as possible in an attempt to be "conservative," I have to say I'm encouraged by the financial results. Yes we lost another boatload of money, but compare us to the other carriers around us. Delta lost close to $400 million and is still considering more furloughs while increasing RJ flying. AMR lost close to half a billion bucks. US Air lost $269 million and is talking about taking the government loan bailout. God knows what UAL will anounce tomorrow. SWA made a small profit (no surprise there) but that was 82% lower than this time last year. I hate being furloughed as much as anyone, but if/when we get recalled I'd rather come back to a stable, profitable airline than come back to a company looking at concessions, no growth, and a questionable future. I'm gonna try to look at the glass as half full, see that we were the only major (non-SWA) that made a profit in March, have the industry's highest load factor (and probably highest RASM), beat Wall Street's predictions on how much we'd lose, and still have $2.6 billion in the bank. So I'm gonna have a beer or two, collect my unemployment checks, and fly as much as I can in the Reserves. I'm just glad I have a job to go back to, I know a lot of unemployed pilots who are looking at 2-3 years before most majors even start to interview again.

Hang in there boys and girls. As bad as it is, remember it could always be worse.
 

Boeingman

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MsFan said:
Hang in there boys and girls. As bad as it is, remember it could always be worse.
Unfortunatley, I think this industry is going to get a lot worse this year. These financials are simply shocking.

There is no way these companies can continue to lose this amount of money.
 

Daysoff

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I have to agree with MSFAN. While the furlough sucks, I am willing to stay out a little longer if needed in order to return to a very stable and profitable airline where I can finish my career.

If you listen to the conference call about 1st quarter losses, you will hear that Mickey Foret says our capacity will only be down 5% by the end of the year. This is obviously managements projections and we all know how conservative they can be. Also, I don't think NWA has never had a real excess of pilots and our pilot group is by far the most productive of the majors (except for SWA) so I am hopefull that recalls definately happening by late fall with most/all back by spring of '03 and I believe hiring will have to begin as soon as the recalls are complete. Sounds like the A320 flying in Narita has real good advanced bookings and hopefully lead to more flying over there.
 
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