Northwest posts $2.4-B revenue in Q2 despite global slowdown

Despite the global economic slowdown following the Sept. 11 terrorist attacks, Northwest Airlines was able to regroup fast enough to register a revenue of $2.4 billion in the second quarter this year.

Northwest regrouped by pulling back some of its investments, reducing its scheduled flights by 15 percent, trimming corporate fat, and tightening its expenditure.

Even after undertaking all these measures, however, Northwest vice president for international Robert Isom said the company like the rest of the industry could not escape the negative impact of the terrorist attacks last year.

Isom admitted that the challenges for Northwest as well as the entire industry remained enormous.

"There has been a 20-percent decline in business travel, which is the high-yielding passengers. In the Pacific region, capacities dropped by 12 to 13 percent," he said.

Operating margins were down to $98 million in the second quarter.

Traffic dropped by 8.2 percent and capacity by 8.8 percent in June this year compared to the same month last year. Revenue passenger miles (RPM) reached only 6.65 billion against total available seat miles (ASM) of 8.16 billion.

Isom said their target is to regain the business travelers particularly for the Philippine market.

"We want to speed up the process since we pulled back the capacities in the Pacific market. We want to bring back the high-yielding passengers," Isom said, adding that the carrier is taking in a new set of state-of-the-art aircraft to replace its fleet.

Northwest’s new fleet include 16 Boeing 757-300s, 757-200s, and Airbus 8320s as well as new engines. "We receive deliveries on one new aircraft or engine every week."

Recently, the Philippine operations introduced the Biz Perks, a corporate rewards and incentive program focused on the small and medium-sized entrepreneurs. And in the past two weeks, 47 companies had already signed up.

Outgoing Philippine general manager Laurie Lofgren said business is looking for a carrier that gives rewards and incentives not only for the senior managers but also for its employees. Lofgren has been reassigned to Northwest operations in China and replacing her is Ray Nishihira.

Northwest is considered the fourth largest carrier, making 1,700 daily departures serving 750 cities in 120 countries on six continents. It forged the first-ever global joint service, twice-weekly flights with KLM Royal Dutch Airlines in 1991.

It has been operating in the Philippines for five decades now and it is currently operating 14 weekly flights from Manila to the United States through Japan.