Head of Northwest says more cost-cutting ahead

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Head of Northwest says more cost-cutting ahead

MINNEAPOLIS (AP) =97 The head of Northwest Airlines, which has cut $1.1=20
billion in fixed costs since early 2001, said Friday that more cost-cutting=
=20
is ahead as the industry continues to battle a slow economy and lower=20
passenger traffic.
Chief Executive Richard Anderson, speaking in Florida at an industry=20
conference that was broadcast over the Internet, said he expects capacity=20
to remain flat in 2003. Anderson had previously forecast a 3% increase in=20
capacity in 2003. As a result Northwest will seek savings from suppliers=20
and airport authorities at its hubs in Minneapolis and Detroit. The goal is=
=20
to lower the airline's cost per available seat mile, or CASM, a=20
closely-watched measurement in the industry. "I think the market is moving=
=20
in our favor in terms of aircraft," said Anderson, mentioning that=20
Northwest is currently negotiating with plane manufacturer Airbus. "It will=
=20
be reflected in our deals one way or another. There'll be a lot of pressure=
=20
on all the suppliers."

The Eagan-based carrier does business with three airplane companies =97=20
Boeing, Airbus and Bombardier, which makes Canadair Regional Jets. Its=20
engine suppliers are General Electric and Pratt & Whitney. Northwest has=20
said it will receive 53 new airplanes in 2003, including 16 narrow-bodied=20
A319 and A320 aircraft and six A330s from Airbus; 22 Canadair Regional Jets=
=20
and nine Boeing 757-300s. But the airline's current plan to take delivery=20
on 47 new planes in 2004 is being "re- evaluated," Anderson said. Northwest=
=20
already has approached the Metropolitan Airports Commission in Minneapolis=
=20
about holding 2003 spending at this year's level. The MAC has said it may=20
have heat the airport less in winter and use less air conditioning in=20
summer, close the new Humphrey Terminal during the low-travel months from=20
May to October and lay off employees. "We're continually looking for ways=20
to further reduce our costs," said spokeswoman Mary Beth Schubert.

"At this time, we do not anticipate any significant layoffs beyond what has=
=20
been announced in recent weeks," she added.
Northwest announced last month that it will close its Atlanta maintenance=20
center, a reservations center in Long Beach, Calif., and some ticket=20
offices, resulting in the layoff or transfer of nearly 2,000 employees to=20
bring its worldwide employment to about 43,000, down from its peak of about=
=20
55,000. Northwest Airlines also said Friday it will begin charging=20
customers who check bags weighing between 50 and 70 pounds. The $25 fee=20
takes effect Dec. 15. However, Northwest is lowering to $50 its current fee=
=20
of $80 for bags weighing 70 to 100 pounds and will no longer accept bags=20
weighing more than 100 pounds.


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