Air Transport

Northwest Airlines intends that its planned new regional subsidiary will operate more than 100 regional aircraft with 70-100 seats by 2010, according to an internal document obtained by Flight International’s sister online news service Air Transport Intelligence.

With the new division facing opposition from pilots, the airline explains in its internal magazine Passages that the division, dubbed “NewCo”, will be used to defend the carrier’s core markets in the USA’s East Coast and Midwest regions. Northwest says that the new company will bring the carrier to fleet-mix levels already planned by many of its domestic competitors and guarantee up to 800 jobs for pilots laid off.

The airline says it has not decided what aircraft will be operated by NewCo, but confirms it is in talks with Bombardier and Embraer. Northwest says NewCo will have its own air operator’s certificate and could also operate regional services for other airlines.

The creation of NewCo is a key part of Northwest’s reorganisation plan, which has been conducted under the protection of the USA’s Chapter 11 bankruptcy laws since September. The carrier’s pilots, however, have rejected the concept, saying it is an attempt to cut staff levels by up to 20%, and countered with a plan to operate the larger regional jets as part of Northwest’s mainline operations.

“NewCo is unacceptable,” says the Air Line Pilots Association. “We will not sacrifice pilot careers for a flying job at a start-up airline that may be sold off in the near future.”

But Northwest’s management counter in an internal message: “As a standalone carrier, NewCo is better able to acquire capital through third parties to finance the purchase of new regional jets.” It adds that with “billions of dollars” already committed to funding the renewal of its international and cargo fleets, the creation of a regional subsidiary “with its own balance sheet would remove the additional burden of financing new regional jets”.

Under Northwest’s plan, from 2007 NewCo will operate 60 aircraft with 70-76 seats and 45 with 100 seats. Thirty-five 70-seaters will be used to replace Northwest’s fleet of Avro RJ85s, while the remaining 25 will be used to address “growth needs in small and medium ‘Heartland’ markets”.

“Less than half the new regional jets – 45 – will be 100-seaters,” says Northwest, adding that it includes 19 aircraft to replace ageing McDonnell Douglas DC-9s and 26 additional 100-seaters to meet demand.

DARREN SHANNON/WASHINGTON DC