Northwest Airlines to Increase Fares

Northwest Airlines has announced that, in response to rising fuel costs, it will match the fare increases by approximately 3% to 5%, first implemented by United Airlines and matched by Delta Air Lines, American Airlines, and Continental Airlines.

The fare increase comes on the heels of this first quarter earnings report, showing Northwest Airlines lost $4.1 billion. Earlier in April 2008, the airline has announced a plan to mitigate the dramatic fuel cost increases.

The plan included revenue enhancements from increased fees, fares and fuel surcharges; domestic capacity reductions of 5%; a fleet reduction of 15 to 20 aircraft; an estimated $100 million reduction in non-aircraft capital expenditures; and a $100 million improvement to the airline’s bottom line, profit and loss statement, that will be achieved through other cost reductions, productivity improvements and revenue enhancements.

Jim Cron, senior vice president of revenue management at Northwest Airlines, said: “We are making this move to offset the extraordinarily high cost of fuel.”