Northwest Airlines Reports Profits, Suffers from Pilot Shortage

Northwest Airlines, America’s fifth largest carrier, emerged from bankruptcy at the end of May and has reported a profit for the second quarter of 2007. Net profit was $2.15 billion in second quarter 2007 compared with a net loss of $285 million in the same period 2006. However, the company has also cancelled hundreds of flights in recent days due to a shortage of pilots. The company blames the pilots, but part of the problem is insufficient staff.

On Monday, the airline canceled 127 flights out of its 1,424 scheduled. That is an improvement over Sunday’s 225 flights canceled. The difficulty according to the company lies with the pilots. Roman Blahoski, a press flak at Northwest, said, “We’re looking at pilot absenteeism, pilots not reporting for duty as scheduled.” And indeed, pilots calling in sick is a problem, but why aren’t there enough at the end of the month? Do pilots tend to fall ill around the 27th of each month?

Actually, the airline was overly aggressive about cutting costs while in bankruptcy at the expense of adequate staffing. The company had to increase the number of hours pilots flew every month from 80 hours to 90 hours, and because the company was bankrupt, the pilots’ union more or less had to take it. The federally mandated ceiling is 100 hours monthly. By increasing the hours flown per worker, the company could get by with fewer workers. Still, it furloughed too many.

Weather is another consideration. Pilots stuck on the ground due to weather wind up flying more hours all at once as the airlines try to catch up. Weather affects airlines more or less evenly. While there is a little geographic concentration (storms in Atlanta hit everybody, but Delta gets hits a bit harder), weather doesn’t account for the fact that United cancelled only 5% of its Monday flights and Southwest had to cancel only 1%.

To combat this problem, Northwest is recalling some 200 pilots, who will need 40 days to train in order to be able to fly again. Also, it is cutting 3% of its overall flight schedule for August. The result will be even more crowded planes, and there are no guarantees that enough pilots will be able to fly to prevent more cancellations at the end of August. At some stage, the $2.15 billion net profit is going to suffer. A bit more planning while in bankruptcy could have avoided the damage to the brand.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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