made money in the third quarter before special items and expects to be profitable for the year.
However, the fifth largest carrier, which is reorganizing under bankruptcy court protection, said it lost money in September and expects to report a loss for the last four months of the year.
In the third quarter, Northwest generated a net profit of $252 million excluding special items, reversing a year-ago loss of $234 million. Revenue was $3.41 billion, up 0.9%. In September, excluding special items, the company lost $13 million.
"Our third-quarter results are a significant improvement over last year's results and demonstrate further that we are making steady progress in restructuring Northwest Airlines," CEO Doug Steenland said in a prepared statement. "However, our September loss indicates that we still have work to do in order to reach our goal of sustained profitability."
Including special items associated with its reorganization, Northwest reported a net loss for the quarter of $1.2 billion, or $13.50 a share, compared with a loss of $475 million, or $5.45 a share, a year earlier. In September, including special items, the carrier lost $337 million.
Northwest reiterated its guidance of early October that it expects to report a loss, excluding reorganization items, for the last four months of the year. For the full year, excluding special items, the carrier forecasts a modest profit margin of roughly 2% on revenue of more than $12 billion.
During the quarter, Northwest increased mainline revenue per available seat mile by 11.8%, despite an 8% reduction in capacity. On a consolidated basis, RASM rose 12.8% while capacity fell 9.1%.
On the cost side, the airline reported cost per available seat mile excluding fuel of 7.27 cents, down 15% from a year earlier. Wages and benefits costs fell by 26.2%, while aircraft rental expenses fell by 49%.
Aviation consultant Mike Boyd said Northwest is "on track," noting: "They have a clear vision of what they want to do. They understand that their service from China will dump people in Detroit, and that those people will travel all over the system after that. They will also have the (Boeing) 787 years before anyone else."
Northwest ended the quarter with $2.1 billion in unrestricted cash and short-term investments.Shares of Northwest continue to trade, but trading will cease when the airline emerges from bankruptcy and issues new stock.