Airlink Posts Profitable Operations for 2007

Northwest Airlink joined most other major carriers in reporting profitable regional operations last year when its revenues were up slightly in Northwest’s first year out of bankruptcy while expenses dropped by nearly half. Regional carriers contributed $1.4 billion in revenues during 2007, up 0.4...

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Northwest Airlink joined most other major carriers in reporting profitable regional operations last year when its revenues were up slightly in Northwest’s first year out of bankruptcy while expenses dropped by nearly half. Regional carriers contributed $1.4 billion in revenues during 2007, up 0.4 percent compared to the $12.5 billion in Northwest’s consolidated revenues. Regional expenses dropped 44.8 percent to $776 million, while consolidated expenses dropped 3.4 percent to $11.4 billion for the year. Related Story  The Airlink program follows profitability reports by Delta Connection, United Express and US Airways Express. Regional operations losses were reported by Horizon, Frontier Jet Express/Lynx and American Eagle, which has been reorganized by AMR for sale. Related Story
Northwest, which launched its second wholly owned regional operator, Compass Airlines, last year, is projecting a 35 to 40 percent growth in regional flying in the first quarter and a 50 to 55 percent growth for 2008. It also acquired Airlink partner Mesaba Aviation last year.
The major’s 2007 pre-tax profit of $764 million before reorganization items, a 154 percent improvement over its 2006 pre-tax income of $301 million before reorganization items, achieving a 6.1 percent pre-tax margin, which, it said, was the best among U.S. network carriers.
During the fourth quarter, regional revenues rose 20.9 percent to $370 million while expenses dropped 39.3 percent to $193 million. For the fourth quarter, Northwest reported a net loss of $8 million, or $0.03 cents per diluted share. Results for the fourth quarter include a $14 million pre-tax loss associated with the sale of its remaining equity interest in Pinnacle Airlines. Excluding this item, Northwest’s results were break-even for the fourth quarter of 2007. In the fourth quarter of 2006, Northwest reported a $267 million net loss, or $3.06 per diluted share.
Doug Steenland, Northwest Airlines’ president and chief executive officer, said, “This marks our second consecutive year of profitability and the third highest pre-tax profit in company history. Excluding reorganization items, Northwest’s 2007 results improved by $463 million over 2006 and over $2.1 billion when compared to 2005. Our 2007 pre-tax margin of 6.1 percent is also the highest among the network carriers. I want to recognize the hard work of our employees and management team for delivering these industry-leading results.”