Is NWA strategy smart?

Who cares if its an old fleet: If it aint broke dont fix it

Who cares? Think a minute. How many posts on this forum from people who are going to fly from A to B and wondering : ” Do they have PTV’s”?
I guess having a state of the art fleet is also a commercial factor.

I kinda agree with you : i don’t really care myself, but I think that a lot of people do….

Who cares if its an old fleet: If it aint broke dont fix it

Who cares? Think a minute. How many posts on this forum from people who are going to fly from A to B and wondering : ” Do they have PTV’s”?
I guess having a state of the art fleet is also a commercial factor.

I kinda agree with you : i don’t really care myself, but I think that a lot of people do….

Bring back the DC-3? In an industry were the leaders of the future will be those that are the most efficient such decisions such as keeping old DC-9’s vs. replacing them with A320’s could be the deciding factor.

Bring back the DC-3? In an industry were the leaders of the future will be those that are the most efficient such decisions such as keeping old DC-9’s vs. replacing them with A320’s could be the deciding factor.

Who cares if its an old fleet: If it aint broke dont fix it

Who cares if its an old fleet: If it aint broke dont fix it

Didnt NWA start replacing DC 10s with 330s?

Yep , they started. One can see A330’s at CDG now.

Didnt NWA start replacing DC 10s with 330s?

Yep , they started. One can see A330’s at CDG now.

Didnt NWA start replacing DC 10s with 330s?

Didnt NWA start replacing DC 10s with 330s?

I thought that NWA was phasing out their DC-10’s and 742’s which would only leave the DC-9’s. The days of “paid for” aircraft advantages is probably gone. Those DC-9’s are fuel hogs especially on the short routes that they run them on. We’ve seen our fuel costs over double. While the rest of the industry is enjoying cheaper operating costs on their 73NG’s and A320’s, NWA is flying their Jurassic Jets. It’s all about efficiency.

I thought that NWA was phasing out their DC-10’s and 742’s which would only leave the DC-9’s. The days of “paid for” aircraft advantages is probably gone. Those DC-9’s are fuel hogs especially on the short routes that they run them on. We’ve seen our fuel costs over double. While the rest of the industry is enjoying cheaper operating costs on their 73NG’s and A320’s, NWA is flying their Jurassic Jets. It’s all about efficiency.

From the New York Times

Northwest Airlines said yesterday that it was increasing the amount it wanted in labor concessions to $1.1 billion a year and that it would seek to freeze employee pension plans.

The moves were the latest sign of the toll that record fuel prices are taking on the airline industry.

Northwest, which began pushing its unions for wage and benefit cuts more than two years ago, had sought $950 million in cuts, but the chief financial officer hinted last week that the airline would have to increase that amount. Northwest and other airlines are being hurt by fuel prices that have reached $1.62 a gallon, up 25 cents since mid-February. That is a third higher than they paid at this time last year, according to the Energy Department.

The increase has prompted furious cost reductions at several airlines, including Northwest. This month, Northwest said it would take 30 planes out of its fleet, including two dozen of its aging McDonnell-Douglas DC-9’s, which would eliminate 130 jobs. The airline also said it expected its available seats this year to be flat with 2004, instead of growing 2 percent to 3 percent.

Despite the moves, Northwest has been unable to persuade union members to agree to wage and benefit cuts. Only Northwest’s pilots, who approved a two-year contract with $265 million in cuts last fall, and its salaried employees, who contributed $35 million in cuts, have gone along with the company’s request.

The airline has not been able to reach agreements with unions representing its flight attendants, mechanics, ground workers and other employees. A federal mediator is taking part in talks between the airline and several unions.

A Northwest spokesman, Kurt Ebenhoch, said the airline would focus first on winning wage and benefit cuts from those unions. Once that is complete, Mr. Ebenhoch said, the airline planned to resume negotiations with its pilots on another round of concessions. Northwest did not specify how much it would seek from each union.

The airline did not set a deadline for obtaining the cuts, but said it hoped to complete negotiations as soon as possible.

Northwest is well behind its rivals in its quest for wage and benefit cuts. Workers at the two major airlines in bankruptcy protection, United and US Airways, have agreed to multiple cuts since 2002, while unions at American, Delta and Continental have granted wage and benefit concessions in the last two years.

In addition to gaining cuts, Northwest wants to freeze its three employee pension plans, covering pilots, other union members and salaried employees, and replace them with defined-contribution plans like a 401(k) program, the airline said. Northwest’s three pension plans have an unfunded liability of $3.8 billion.

Freezing a plan means that it will not accept new members, and that the company will not make any more contributions. Workers covered by the frozen plans would receive benefits on retirement.

Northwest’s pilots’ union told its members last month that it would discuss the idea with the airline.

Pilots at Delta Air Lines, which are that company’s only unionized employee group, agreed to freeze their pension plan last year, when they granted concessions of $1 billion a year.

In an employee newsletter distributed this month, the chief executive of Northwest, Douglas M. Steenland, said fixing the pension problem was critical to efforts to restore its profitability.

If it cannot do that, Mr. Steenland said, Northwest could be the latest airline to seek bankruptcy protection. Northwest has lost $2.5 billion in the last four years, but it has maintained a strong cash position, which industry analysts say has been its best protection against a Chapter 11 bankruptcy filing.

Mr. Steenland warned that a bankruptcy filing could damage the airline. “It could, in fact, be the beginning of the end for Northwest,” he said, “as it has for other airlines that originally saw bankruptcy as a way out of crisis.”

From the New York Times

Northwest Airlines said yesterday that it was increasing the amount it wanted in labor concessions to $1.1 billion a year and that it would seek to freeze employee pension plans.

The moves were the latest sign of the toll that record fuel prices are taking on the airline industry.

Northwest, which began pushing its unions for wage and benefit cuts more than two years ago, had sought $950 million in cuts, but the chief financial officer hinted last week that the airline would have to increase that amount. Northwest and other airlines are being hurt by fuel prices that have reached $1.62 a gallon, up 25 cents since mid-February. That is a third higher than they paid at this time last year, according to the Energy Department.

The increase has prompted furious cost reductions at several airlines, including Northwest. This month, Northwest said it would take 30 planes out of its fleet, including two dozen of its aging McDonnell-Douglas DC-9’s, which would eliminate 130 jobs. The airline also said it expected its available seats this year to be flat with 2004, instead of growing 2 percent to 3 percent.

Despite the moves, Northwest has been unable to persuade union members to agree to wage and benefit cuts. Only Northwest’s pilots, who approved a two-year contract with $265 million in cuts last fall, and its salaried employees, who contributed $35 million in cuts, have gone along with the company’s request.

The airline has not been able to reach agreements with unions representing its flight attendants, mechanics, ground workers and other employees. A federal mediator is taking part in talks between the airline and several unions.

A Northwest spokesman, Kurt Ebenhoch, said the airline would focus first on winning wage and benefit cuts from those unions. Once that is complete, Mr. Ebenhoch said, the airline planned to resume negotiations with its pilots on another round of concessions. Northwest did not specify how much it would seek from each union.

The airline did not set a deadline for obtaining the cuts, but said it hoped to complete negotiations as soon as possible.

Northwest is well behind its rivals in its quest for wage and benefit cuts. Workers at the two major airlines in bankruptcy protection, United and US Airways, have agreed to multiple cuts since 2002, while unions at American, Delta and Continental have granted wage and benefit concessions in the last two years.

In addition to gaining cuts, Northwest wants to freeze its three employee pension plans, covering pilots, other union members and salaried employees, and replace them with defined-contribution plans like a 401(k) program, the airline said. Northwest’s three pension plans have an unfunded liability of $3.8 billion.

Freezing a plan means that it will not accept new members, and that the company will not make any more contributions. Workers covered by the frozen plans would receive benefits on retirement.

Northwest’s pilots’ union told its members last month that it would discuss the idea with the airline.

Pilots at Delta Air Lines, which are that company’s only unionized employee group, agreed to freeze their pension plan last year, when they granted concessions of $1 billion a year.

In an employee newsletter distributed this month, the chief executive of Northwest, Douglas M. Steenland, said fixing the pension problem was critical to efforts to restore its profitability.

If it cannot do that, Mr. Steenland said, Northwest could be the latest airline to seek bankruptcy protection. Northwest has lost $2.5 billion in the last four years, but it has maintained a strong cash position, which industry analysts say has been its best protection against a Chapter 11 bankruptcy filing.

Mr. Steenland warned that a bankruptcy filing could damage the airline. “It could, in fact, be the beginning of the end for Northwest,” he said, “as it has for other airlines that originally saw bankruptcy as a way out of crisis.”

DTW may be a majoy hub but doenst have half as many connections through from Ireland/UK passengers as EWR does.

That was my point, NWA’s strategy is very different, airline resources are always quite tight and US airlines tend to have certain primary focuses (this is a historical thing also). Because of the locations of DTW and MSP they will never be as efficient for transatlantic traffic as EWR or other more eastern points, the further west you get the less options can be realistically offered to compete. EWR is in a good position because it is a relatively short hop from Europe. It then doesn’t matter where you fly onto as you will almost certainly not eb back tracking. This means that CO can offer more connections and therefore finds it easier to fill planes, something which NWA would sturggle to do if it operated large scale operatiosn to regional UK and European airports. It all goes back to the hub discussions we’ve had in other threads. You have to understand the benefits and disbenefits of each airlines’ hubs to see why the airlines are doing what they do.

It is extremely important to recognise that whilst CO is offering a lot of connections fromt hese regional airports it is mainly able to do so because there is still large point to point demand from most regional airports to New York. They can increase the overall yields on the flight by charging more for these point to point passengers, and therefore they essentially subsidise the feder traffic to some extent. Because MSP and DTW are not major destinations in their own rights then NWA would struggle to prop up the feeder traffic through the provision of some seats to higher yield point to point traffic.

DTW may be a majoy hub but doenst have half as many connections through from Ireland/UK passengers as EWR does.

That was my point, NWA’s strategy is very different, airline resources are always quite tight and US airlines tend to have certain primary focuses (this is a historical thing also). Because of the locations of DTW and MSP they will never be as efficient for transatlantic traffic as EWR or other more eastern points, the further west you get the less options can be realistically offered to compete. EWR is in a good position because it is a relatively short hop from Europe. It then doesn’t matter where you fly onto as you will almost certainly not eb back tracking. This means that CO can offer more connections and therefore finds it easier to fill planes, something which NWA would sturggle to do if it operated large scale operatiosn to regional UK and European airports. It all goes back to the hub discussions we’ve had in other threads. You have to understand the benefits and disbenefits of each airlines’ hubs to see why the airlines are doing what they do.

It is extremely important to recognise that whilst CO is offering a lot of connections fromt hese regional airports it is mainly able to do so because there is still large point to point demand from most regional airports to New York. They can increase the overall yields on the flight by charging more for these point to point passengers, and therefore they essentially subsidise the feder traffic to some extent. Because MSP and DTW are not major destinations in their own rights then NWA would struggle to prop up the feeder traffic through the provision of some seats to higher yield point to point traffic.

For sure NW started to get rid of their DC9’s and bought A32x.
I don’t know what will be their future renewal strategy…

For sure NW started to get rid of their DC9’s and bought A32x.
I don’t know what will be their future renewal strategy…

DTW may be a majoy hub but doenst have half as many connections through from Ireland/UK passengers as EWR does.

Bmused weve had some interesting conversations about Boeing/Airbus on MSN (before you blocked me) will NWA replace the DC-9s with Airbus or Boeing and Im not trying to start a fight,IM interested.

DTW may be a majoy hub but doenst have half as many connections through from Ireland/UK passengers as EWR does.

Bmused weve had some interesting conversations about Boeing/Airbus on MSN (before you blocked me) will NWA replace the DC-9s with Airbus or Boeing and Im not trying to start a fight,IM interested.