EAGAN, United States (AFP) - Northwest Airlines said it plunged into a quarterly net loss as revenue gains were incinerated by soaring costs for jet fuel.
The airline reported a net loss of 46 million dollars, or 54 cents a share, in the three months to September 30, reversing a year-earlier net profit of 42 million dollars, or 49 cents a share.
Revenue, however, surged 13.4 percent to 3.05 billion dollars.
"As in recent quarters, our operating performance was negatively impacted by record high fuel cost that continues to drive the dynamics of the airline industry," president and chief executive Doug Steenland said in a statement.
"As an example of our efforts to address high fuel prices, on Tuesday we expanded a 10 dollar each-way fuel surcharge to nearly all of our domestic fares."
Northwest did well against major competitors by keeping a revenue premium and a strong cash balance while driving down costs, he said.
"Concerning labor cost restructuring, as anticipated, we have announced a tentative two-year agreement with our pilots. The proposed agreement, subject to ratification by Northwest pilots and a satisfactory restructuring of our revolving credit facility, includes 300 million dollars in annual labor cost savings from pilots and salaried workers," Steenland said.
Northwest was now in contract talks with unions representing ground workers flight dispatchers, he said. Preliminary talks would start "shortly" with representatives of the mechanics, flight attendants, meterologists and technicians, he added.
In the past quarter, operating expenses soared 16.8 percent to 2.97 billion dollars.
Fuel averaged 1.24 dollars a gallon, up 64.6 percent from a year ago.
Northwest ended the quarter with a cash balance of 2.68 billion dollars, of which 2.54 billion dollars was unrestricted.
"We are working with our bank partners to restructure our 975 million dollars revolving credit facility well in advance of its scheduled maturity," said chief financial officer Bernie Han.