North by Northwest
Veteran
Northwest, Detroit Metropolitan Airport largest carrier, is trying to claw its way back to health by slowly adding new flights and seats. Despite some progress, though, its passenger levels remain 11 percent below 2000 and industry competition is tougher than ever.
"Eventually, we will get back to those numbers," said Phil Haan, Northwest's executive vice president for international, alliances and informational technology. "But don't ask when that will happen. The whole system is still reflecting an enormous fall."
The world's fifth largest airline has taken a cautious approach to rebuilding its international and domestic systems. It expects a 3 percent growth for all of 2004 and a 5-6 percent growth in 2005. Internationally, Northwest has added just two new destinations this year on its route system - Guangzhou, China, and Kitchener, Ontario. But it's added seats and more flights to existing foreign markets.
Seven months ago, Northwest doubled its capacity from Detroit to Toyko, Japan, by going from one- to two-a-day daily flights. In June, the airline added a Portland, Ore., to Tokyo flight. The carrier also is adding more seats to existing routes. Northwest is in the process of replacing its outdated 273-passenger DC10-30 international fleet with new Airbus 330-300 aircraft which seat 298, a move that adds almost 10 percent more capacity.
After September 11, Northwest stopped flying non-stop to China. Everything now goes through one of three airports in Japan.
"Things are picking up in international travel," Haan said. "There is some evidence that even business from Japan to this country is improving." Northwest has been a bit more aggressive in expanding its domestic market. But the carrier's regular jets are expected to see only a 1-3 percent growth in 2005
Small, 50-seat regional jets flown by Pinnacle Airlines as Northwest Airlink are expected to see a tremendous growth over the next several years.
Executives at Northwest project that for all of 2004 that capacity on Airlink aircrafts will jump 28 percent over a year ago.
But the growth won't stop there. In 2005, another increase of about 25 percent is expected for Airlink. By mid-2005, Northwest's Airlink affiliates will be flying 129 regional jets.
Thomas Becher, a Northwest spokesman, said the regional jets are being used to upgrade from smaller, 34-seat turbo prop aircraft, add smaller markets from Northwest's three hubs and in some cases fly to new destinations that simply can't fill a full-size jet.
"From Detroit, we've added 10 new cities this year by using regional jets," Becher said. "We've also been doing more point-to-point flying (not going through a hub) from places like Indianapolis, Milwaukee and Lansing."
Some airlines have gone in a different direction to rebuilding its international and domestic systems.
United Airlines, for example, has accelerated plans to add 14 percent more available seats on more profitable international routes while cutting 12 percent of its domestic capacity. United has pulled 68 of its aircrafts off its domestic route system.
Airline analysts agree with Northwest's slow approach to recovery.
"You can grow really fast, but then you have excess capacity and you end up giving away your seats,'" said Joel Denney, an analyst with U.S. Bancorp Piper Jaffray in Minneapolis. "I would expect them to take a disciplined approach."
Denney said that as the economy improves, he would expect Northwest to push more profitable international traffic -- a piece of the market that so far has little or no competition from low-fare carriers. He also expects Northwest to go back to non-stop flights to China soon.
Another analyst, Terry Trippler with the Internet travel site hubcitiesmsp.com in Minneapolis, said that Northwest's strategy on mid-America and international routes is a perfect formula. But Trippler questions whether using smaller regional jets on longer flights could turn off travelers.
"Regional jets are a good idea when you're flying between a hub and a small market, like Detroit to Traverse City," said Trippler. "But in some cases, they are replacing their regular airplanes with these toy jets. They offer no business class seats.
"Travelers have no option to upgrade their seats. Your frequent travelers are going to rebel. They aren't going to like flying two hours in a small seat."
Trippler said the best thing going for Northwest is its $1.2 billion terminal at Detroit Metro.
He called it the finest international gateway in the United States.
Northwest has nearly 650 daily departures from its Detroit hub. They also have hubs in Minneapolis, Memphis, Tokyo, Amsterdam, and a pending build-up of flights to Paris and Rome.
"Northwest's growth should be feeding passengers to its international flights out of Detroit," he said.
"Eventually, we will get back to those numbers," said Phil Haan, Northwest's executive vice president for international, alliances and informational technology. "But don't ask when that will happen. The whole system is still reflecting an enormous fall."
The world's fifth largest airline has taken a cautious approach to rebuilding its international and domestic systems. It expects a 3 percent growth for all of 2004 and a 5-6 percent growth in 2005. Internationally, Northwest has added just two new destinations this year on its route system - Guangzhou, China, and Kitchener, Ontario. But it's added seats and more flights to existing foreign markets.
Seven months ago, Northwest doubled its capacity from Detroit to Toyko, Japan, by going from one- to two-a-day daily flights. In June, the airline added a Portland, Ore., to Tokyo flight. The carrier also is adding more seats to existing routes. Northwest is in the process of replacing its outdated 273-passenger DC10-30 international fleet with new Airbus 330-300 aircraft which seat 298, a move that adds almost 10 percent more capacity.
After September 11, Northwest stopped flying non-stop to China. Everything now goes through one of three airports in Japan.
"Things are picking up in international travel," Haan said. "There is some evidence that even business from Japan to this country is improving." Northwest has been a bit more aggressive in expanding its domestic market. But the carrier's regular jets are expected to see only a 1-3 percent growth in 2005
Small, 50-seat regional jets flown by Pinnacle Airlines as Northwest Airlink are expected to see a tremendous growth over the next several years.
Executives at Northwest project that for all of 2004 that capacity on Airlink aircrafts will jump 28 percent over a year ago.
But the growth won't stop there. In 2005, another increase of about 25 percent is expected for Airlink. By mid-2005, Northwest's Airlink affiliates will be flying 129 regional jets.
Thomas Becher, a Northwest spokesman, said the regional jets are being used to upgrade from smaller, 34-seat turbo prop aircraft, add smaller markets from Northwest's three hubs and in some cases fly to new destinations that simply can't fill a full-size jet.
"From Detroit, we've added 10 new cities this year by using regional jets," Becher said. "We've also been doing more point-to-point flying (not going through a hub) from places like Indianapolis, Milwaukee and Lansing."
Some airlines have gone in a different direction to rebuilding its international and domestic systems.
United Airlines, for example, has accelerated plans to add 14 percent more available seats on more profitable international routes while cutting 12 percent of its domestic capacity. United has pulled 68 of its aircrafts off its domestic route system.
Airline analysts agree with Northwest's slow approach to recovery.
"You can grow really fast, but then you have excess capacity and you end up giving away your seats,'" said Joel Denney, an analyst with U.S. Bancorp Piper Jaffray in Minneapolis. "I would expect them to take a disciplined approach."
Denney said that as the economy improves, he would expect Northwest to push more profitable international traffic -- a piece of the market that so far has little or no competition from low-fare carriers. He also expects Northwest to go back to non-stop flights to China soon.
Another analyst, Terry Trippler with the Internet travel site hubcitiesmsp.com in Minneapolis, said that Northwest's strategy on mid-America and international routes is a perfect formula. But Trippler questions whether using smaller regional jets on longer flights could turn off travelers.
"Regional jets are a good idea when you're flying between a hub and a small market, like Detroit to Traverse City," said Trippler. "But in some cases, they are replacing their regular airplanes with these toy jets. They offer no business class seats.
"Travelers have no option to upgrade their seats. Your frequent travelers are going to rebel. They aren't going to like flying two hours in a small seat."
Trippler said the best thing going for Northwest is its $1.2 billion terminal at Detroit Metro.
He called it the finest international gateway in the United States.
Northwest has nearly 650 daily departures from its Detroit hub. They also have hubs in Minneapolis, Memphis, Tokyo, Amsterdam, and a pending build-up of flights to Paris and Rome.
"Northwest's growth should be feeding passengers to its international flights out of Detroit," he said.
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