Aviation Daily: Northwest's DC-9s Key To Flexibility, Cost Control By Steve Lott/Aviation Daily 17-Jan-2002 7:50 AM U.S. EST Northwest plans to keep operating its large fleet of aging DC-9 narrowbodies well into the future, as the planes are a key part of the carrier's strategy to keep costs low and rebound from the current crisis. As long as industry revenues remain weak, most agree that airlines that keep expenses in check will come out on top. Northwest CEO Richard Anderson views the DC-9 fleet as a significant competitive advantage to keep costs low and maintain its capacity flexibility. "Suddenly our fleet strategy looks good," he told The DAILY in Minneapolis. Northwest today will report a fourth quarter loss, but executives are expected to highlight the fact that the airline has maintained a unit cost advantage relative to the industry. Celebrating his first anniversary next month as CEO, Anderson said the airline's cost-cutting moves and fleet strategy put it a step ahead of most other U.S. majors. The airline flies about 170 DC-9 variations from its three hubs to its wide network of many smaller domestic cities. Anderson said the 30-year-old DC-9 is a perfectly sized aircraft because of its high-frequency operating capability and the fact that there is no comparable replacement available. Anderson cited DAILY data showing that Northwest's block hour costs for its 114 DC-9-30s is $2,133, significantly below the costs of the Boeing 737 and Fokker 100 (DAILY, Nov. 6). "The DC-9s are all paid for, and it is a very profitable, very reliable airplane. It is also very efficient to operate," he said. Northwest operates the DC-9 an average of seven cycles per day on a fairly short stage length. The carrier uses its larger Airbus A319s and A320 on hub-to-hub markets and long-haul flying. "Northwest uniquely needs a 100-seater," he said. "Frequencies are best served by a very efficient, low-cost airplane that has very high reliability." He said that the 737s are not a good replacement as they are too large for the DC-9 markets. "The worst thing you can have in our business is an airplane that's too big for the market," Anderson said. "No airline went out of business for having airplanes that were too small for the market they were serving." While Northwest is occasionally criticized for its aging fleet of DC-9s, Anderson said the airline spent as much as $7 million per aircraft for a complete overhaul, inside and out. "It's basically a completely refurbished airplane," he said. The airline hushkitted all the planes, installed new interiors and fixed all the technical issues that historically caused reliability problems. Because the capital cost of the DC-9 is low, Northwest can carry nine spares to boost its on-time performance and reliability. "We use these airplanes to have a lot of flexibility because the capital cost is essentially zero," he said. The airline also can adjust its capacity quickly thanks to the large fleet of DC-9s. It has retired its MD-80s, 727s, 747-100, and all the 747-200s that are not higher-power, higher-gross-weight versions. Anderson said the airline is working to retire its DC-10-40s "as fast we can." While the airline has retired some of its oldest DC-9-10s and will retire more when they hit about 100,000 cycles or roughly 35 years of age, the DC-9 is a cornerstone of its near-term fleet strategy. Northwest will take delivery of 61 aircraft this year -- 23 regional jets and 38 mainline aircraft.