Northwest Expects Full-Year Profit

A strong July and August bail out the airline.
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Northwest Airlines

(NWACQ.PK)

said it expects to report a modest profit for the year despite a softening in revenue since September.

Although it anticipates a loss for the last four months of the year, Northwest expects to report a pretax margin of approximately 2% on more than $12 billion in revenue, the carrier said in a release that coincided with a monthly report to the bankruptcy court.

Northwest is benefiting from a profit of $272 million on $2.4 billion in revenue during July and August.

It previously reported a $50 million profit on revenue of more than $6 billion during the first six months of the year. The airline's profit figures exclude reorganization costs.

"This expected, modest full-year profit is testament to the success of our ongoing restructuring efforts and the substantial sacrifices made by our employees and other Northwest stakeholders," said CEO Doug Steenland, Northwest president and chief executive officer.

"The full-year profit outlook is also partially reflective of Northwest's reduced capacity," he said. "For full-year 2006, we expect that our systemwide consolidated available seat miles will be approximately 8% lower than 2005."

Northwest's long-term goal is a pretax profit margin of 6% to 7%, Steenland said. The airline has lost $4.2 billion since early 2001.

Northwest is expected to issue new stock when it emerges from bankruptcy in mid-2007. Trading in existing shares would cease.