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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (92342)	3/17/2008 2:01:20 PM
From: stan_hughes	Respond to of 110194

Northwest Airlines joins in on the fare increases -- now repeat after me: there is no inflation, there is no inflation, there is no inflation.... 1:39 pm, March 17, 2008 Northwest CEO: "Our passengers will have to pay more" By Joshua Freed AP Business Writer MINNEAPOLIS (AP) - Northwest Airlines Corp., Michigan's largest passenger air carrier, has matched fare increases announced last week by Continental Airlines Inc. and United Airlines and signaled that belt-tightening measures are on the way, too. Oil has been selling at record highs above $100 a barrel, pushing up the cost of jet fuel and cutting into the income of airlines. Doug Steenland, chief executive of Northwest, said the airline will spend $1.7 billion more on fuel than it expected when it emerged from bankruptcy in May. UAL Corp.'s United Airlines and Continental Airlines raised some round-trip fares as much as $50 heading into the weekend. "Airfares have to go up, and our passengers will need to pay more. Airlines simply cannot absorb these cost increases," Steenland told workers in a hot line message recorded over the weekend. Higher prices will result in fewer passengers, Steenland said, and the size of the airline will need to reflect that. "First we have to tighten our belt. We need to find ways to preserve cash by reducing capital expenditures and operating costs. Fortunately, we have over $3 billion of cash on hand." Steenland did not elaborate on what cost-saving measures he had in mind, and spokeswoman Tammy Lee declined to expand on Steenland's comments. © 2007 Crain Communications Inc.