Losses ballooned at
during the first quarter, as the company struggled with sky-high fuel prices and employee unwillingness to accept pay cuts.
The Eagan, Minn., carrier said it lost $458 million, or $5.28 a share, in the first quarter. That compares with a year-earlier loss of $230 million, or $2.67 a share.
The latest quarter's results included an $18 million loss from the sale of debt to regional partner
. Excluding that item, Northwest lost $440 million, or $5.07 a share, well wide of the $4.56-a-share loss forecast from analysts surveyed by Thomson First Call.
Most airline shares gained, however, and Northwest stock was up 45 cents, or 8.3%, to $5.85.
Revenue increased 7.5% to $2.80 billion from $2.60 billion a year earlier. Analysts had forecast $2.73 billion. Unit revenue declined by 0.6%, on a 4.7% drop in yield, which measures average fares. Even though unit revenue fell, the number was encouraging to some analysts, who had forecast a much larger decline.
"Our results were disappointing," said Doug Steenland, the airline's CEO. "Record high fuel prices and increasingly noncompetitive labor costs on the expense side and excess capacity and competitors' pricing decisions on the revenue side negatively affected our performance during the quarter."
Steenland was likely referring to
Delta Air Lines'
January simplification of its fare structure, which reduced top ticket prices. Other carriers were forced to imitate the move.
Steenland noted Northwest has increased its annual labor savings target $1.1 billion from $950 million. The airline also has asked unions to agree to a freezing of their defined-benefit pension plans.
"While we are realizing the impact of the $300 million in annual pay and benefits cuts for pilots and salaried employees, it remains imperative that we reach new labor agreements with our other unions and complete a second round of pilot negotiations this year," he said.
Northwest remains in federal mediation with three of its unions and continues to negotiate with other work groups.
High fuel prices caused Northwest's operating expenses to increase 14% year over year to $3.1 billion. The company's average fuel cost during the quarter was $1.38 a gallon, up 37.7% from a year before.
Northwest ended the quarter with a cash balance of $2.3 billion, of which $2.1 billion was unrestricted.