NORTHWEST AIRLINES INCORPORATES CARGO DIVISION
Northwest Airlines announced today that its cargo division has been incorporated as a wholly owned subsidiary, Northwest Airlines Cargo Inc., doing business as “NWA Cargo.” This action has been taken so that Northwest can fully capture the opportunities presented by the fast-growing market for air cargo.
Mickey Foret will serve as chairman and CEO of NWA Cargo. This role is in addition to his responsibilities as executive vice president and chief financial officer of NWA Inc., the parent of the new air cargo company. “Northwest was founded to carry air mail for the U.S. Post Office, and cargo is expected to generate approximately $1 billion in revenue this year. The international air cargo market is expected to double in the next 10 years, and the incorporation of NWA Cargo as a wholly-owned subsidiary will increase our focus on this lucrative growth opportunity.”
Among U.S. combination airlines, Northwest is the largest operator of freighter aircraft, with 12 747-200 freighters dedicated to trans-Pacific service. NWA Cargo will manage this freighter capacity, and will also sell the capacity generated by Northwest’s passenger fleet of 424 aircraft.
“The cargo industry is different from the passenger industry,” said Jim Friedel, who will serve as president of NWA Cargo. “While our day-to-day activities will not change in the short-term, the creation of NWA Cargo will facilitate the focus on our business as a profit center. This will provide greater flexibility to pursue opportunities with other cargo airlines, logistics providers, e-commerce ventures, and other companies that are specific to the cargo
NWA Cargo is the largest cargo business among U.S. combination airlines, comprising 8 percent of total Northwest revenues. The fleet of 747 freighters has been grown 50 percent in the last 18 months, with capacity being deployed to the growing cities of Shanghai, Taipei, and Hong Kong. NWA Cargo grew its revenue during 2000 17 percent by improving yields by 9 percent and carrying record amounts of traffic per flight. NWA Cargo will grow its network in April 2001 with service to Seoul, Korea, and by increasing freighter service between Shanghai and the U.S. to three weekly.