Airlines Face Bleak Horizon

During Tuesday's conference call, the airline's executives made clear the urgency of getting further concessions. They said the airline's nonfuel unit labor costs are now the highest in the industry, adjusted for stage length. They also reiterated statements that Northwest could be forced to file for bankruptcy if it can't get the cost savings it's targeting.

A key variable for Northwest and Delta remains what happens to the pension reform legislation in Congress. Both are hoping airlines will get extra time -- they originally appealed for 25 years -- to fund their pension obligations. Both have warned they may have to file for bankruptcy without such an extension.

So, even as most airlines enjoy a better-than-expected quarter, turbulence remains on the horizon, with crippling fuel costs, potential bankruptcies and fare-pressuring domestic competition.