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Northwest emerges from cloud of bankruptcy

Marketplace Staff May 31, 2007
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Northwest emerges from cloud of bankruptcy

Marketplace Staff May 31, 2007
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TEXT OF STORYSCOTT JAGOW: Shares of Northwest Airlines start trading on the New York Stock Exchange once again this morning. Northwest is finally out of bankruptcy. The airline dumped more than $2 billion in costs during Chapter 11, but it still has some issues. Annie Baxter reports from Minnesota Public Radio.


ANNIE BAXTER: Analysts say a lot of the potential turbulence is the kind of stuff all airlines could hit: rising fuel prices, a slowing economy and an environment where it’s hard to raise fares.

But some bumps could fall uniquely in Northwest’s flight path, namely labor.

Bill Hochmuth is a stock analyst with Thrivent Financial for Lutherans. He says even though Northwest had to lower its union workers’ wages and benefits to restructure, the airline’s now staring down some pretty angry employees.

BILL HOCHMUTH: To say that either side is really pleased with the relationship right now, I think would be very much of a stretch. How that relationship will play out over the coming six to 12 months could be key as to how Northwest does during that timeframe.

Northwest wouldn’t comment, but its earnings look to be flying right again.

For its first quarter this year, it posted $100 million in profits, not counting bankruptcy costs. That’s compared with a $129 million loss in the same quarter last year.

In St. Paul, Minnesota, I’m Annie Baxter for Marketplace.

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