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Northwest expects lower passenger-mile revenue

June 13, 2007|From Bloomberg News

Northwest Airlines Corp., the fifth-largest U.S. carrier, expects to make less for each seat flown a mile this quarter as domestic travel demand weakens, Chief Financial Officer David Davis said.

Revenue for each passenger mile will decline 0.5% to 1% from a year earlier, including a 2% to 3% drop on domestic routes, Davis said Tuesday at a Merrill Lynch & Co. transportation conference in New York.

Northwest, responding to slower U.S. economic growth and competitors that have added flights, is trimming expansion plans and now expects capacity to rise 2.5% this year, down from previous projections of 3.7%, Davis said.

Davis' comments echoed statements from carriers including Continental Airlines Inc. in recent weeks about a drop in travel demand and revenue for each passenger mile, an industry benchmark.

Eagan, Minn.-based Northwest exited bankruptcy protection May 31 after cutting its annual costs by $2.4 billion during 20 months of court protection.

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