Northwest Air CEO to Step Down

Northwest Airlines (NWAC Quote - Cramer on NWAC - Stock Picks) has a new boss.

The Eagan, Minn.-based carrier announced that CEO Richard Anderson will be resigning on Nov. 1 to become an executive vice president at UnitedHealth Group (UNH Quote - Cramer on UNH - Stock Picks) but will remain on the carrier's board of directors. Current President Douglas Steenland will become Northwest's new CEO, effective immediately.

"The board of directors is very pleased that Doug, who has been our president since 2001 and a key member of the Northwest senior management team since 1991, will continue to lead the company," said Gary Wilson, Northwest's chairman. "His in-depth knowledge of all areas of the global airline industry, his expertise in major strategic areas and his outstanding leadership skills will be a powerful asset as we continue our drive to return the company to profitability."

In reaction, shares of Northwest rose 20 cents, or 2.4%, to $8.41.

The move comes at a critical time in Northwest's history. Like Delta Air Lines (DAL Quote - Cramer on DAL - Stock Picks), the carrier is currently negotiating with its pilots union, asking for $300 million in annual wage concessions.

The union has countered with a $200 million offer, and while many on Wall Street expect a deal to come before the end of the year, the carrier will be asking other work groups to cut their pay over the next year.

While the carrier's balance sheet and lack of low-cost competition on its routes have kept bankruptcy fears at bay, the tide of red ink has shown no signs of abating. Analysts expect Northwest to lose $6.63 a share in 2004, followed by a loss of $2.41 a share in 2005.