Northwest Airlines Announces More Reductions

For the second time this year, Eagan, Minn.-based Northwest Airlines has announced that it will be making a series of capacity cuts. Although few details were released, the airline promised to retire jets, reduce staff and raise fares, fees and fuel surcharges.

"In response to these extraordinary fuel costs, we are taking prudent actions to reduce our capacity and right-size the airline," CEO Doug Steenland said in a statement last week. "This will allow us to better match our capacity to customer demand as airfares, by necessity, must increase."

Already, Northwest has followed the example set by competitors such as American and United Airlines, instituting a $25 charge on passengers' second and third checked bags. Because the new baggage fees haven't been enough to counterbalance the effects of rising fuel costs, however, in the fourth quarter Northwest plans to reduce domestic and international capacity by 8.5 to 9.5 percent.

Although information on which hubs, routes and employees would be affected by the cuts was not available, Steenland promised "no domestic station closures are planned." He did, however, state that a proposed merger with Delta Airlines is more attractive than ever.

"When we first contemplated a merger with Delta, as oil was approaching $100 a barrel, we knew this was the right deal with the right partner," Steenland concluded. "Now, with oil above $130 a barrel, the case for the merger, with its resulting synergies, is stronger than ever."