Everyone break out the bubbly, Northwest Airlines emerges from bankruptcy protection tomorrow a slightly smaller but a very lean company. The airline cut $4.2 billion dollars in debt, over $400 million from aircraft, and over $1.4 billion in labor costs. All of these amounts are staggering figures.
Vaughn Cordle, who runs number-crunching firm Airline Forecasts and is an airline pilot said, "They're going to have dramatically different economics post-bankruptcy, which is the good news. The bad news is they've beaten down labor so much that they've got morale problems."
You bet NWA will have problems. Flight attendants barely ratified a labor contract the other day. And just today NWA employees gathered at the state capital of Minnesota in St. Paul to protest executive pay by rallying around a giant inflatable rat clutching bags of money in its paws.
Northwest is looking to the future too. With orders for Boeing’s 787 Dreamliner, it is looking to retire some of their planes in their aging fleet. The airline has done a little bit to reduce their fleet age by retiring their DC-10’s but with a very large fleet of DC-9’s, the airline has to go on a buying spree here shortly which is likely to increase their debt load.
So break out the bubbly… rather break out the water and mixed nuts… but only if you’re in first class.
WCCO.com
Related: Flight Attendants Approve Pay Cuts
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