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Thu, Jul 12, 2007

Northwest Airlines Selling Off Nine A319s

Also Announces Management Shakeup

Saying the decision is part of its debt and lease restructuring efforts, Northwest Airlines said Tuesday it had reached an agreement to sell nine of its Airbus A319s... some of the newest planes in its fleet.

"The process for closing each of these sales is underway," said Northwest spokesman Darren Shannon. According to the Minneapolis Star Tribune, he refused to identify a buyer or name a purchase price and linked the deal to the carrier's "successful debt and lease restructuring efforts while in Chapter 11."

As ANN has reported, it hasn't been easy being Northwest lately. Last month crew shortages forced the cancellation of 12 percent of its schedule. The carrier also plans to cut flights and perhaps hire more pilots to prevent future pilot shortages, according to Bloomberg.

NWA pilot's union told reporters it was concerned about the decision, which leaves the carrier with 56 A319s.

"Northwest needs the revenue that could be gained by using these fuel-efficient aircraft," Monty Montgomery, a spokesman for the Northwest branch of the Air Line Pilots Association (ALPA), said. The planes could still be flown "under our current contract with sufficient [pilot] staffing."

Tim Rainey, Northwest's senior vice president overseeing flight operations, notified ALPA in March about plans to phase out the A319s, as well as thin its number of geriatric DC-9s from 115 to 93, according to the union. The carrier has yet to decide upon a replacement aircraft.

ALPA's negotiations committee said in early April, "It makes little sense to us that, in the profit making environment Northwest is now in, this management team is making decisions that limit those profits by selling 319s and not using [company] owned DC-9s."

The carrier wouldn't say which cities would be affected by the cuts in the fleet, according to the Tribune.

It's unclear at this point if this decision has anything to do with the executive shakeup in its airport affairs and finance departments announced Wednesday.

The carrier said two executive appointments would result from an apparent surprise re-retirement of a "key" executive who was instrumental in the design and construction of nearly $3 billion of facilities, including the 125-gate Northwest WorldGateway Terminal at Detroit Metro Airport, and in restructuring the airline's real estate portfolio in bankruptcy.

Jim Greenwald, vice president of facilities and airport affairs, has elected to retire, again, effective July 31. He rejoined NWA in December 2005 to assist the company in its restructuring efforts after having previously retired in early 2005.

Barry Hofer, vice president of financial planning & analysis, will replace Greenwald and will be responsible for negotiation of all airport leases, corporate real estate, and worldwide design and construction programs.

Managing Director of Financial Planning and Analysis Terry Mackenthun, has been named vice president of financial planning & analysis, succeeding Hofer.

Northwest projected in a bankruptcy court filing earlier this year flying done by regional partners is expected to grow rapidly, by at least 16.9 percent a year, the carrier said.

NWA subsidiaries, Mesaba and Compass airlines, will reportedly operate 36 new 76-seat regional jets each.

"You are going to see movement from 100- to 130-seat jets down to the new 76-seat jets that they just started receiving," senior research analyst at Thrivent Investment Management Bill Hochmuth said.

"Passengers better get used to flying in regional jets."

FMI: www.nwa.com

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