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Strike puts NWA in the red
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October 20, 1998: 10:19 a.m. ET
Carrier posts 3Q loss of $224M, or $2.91 share; below analysts' forecasts
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NEW YORK (CNNfn) - Last summer's Northwest Airlines pilot strike caused the carrier's financial results to plunge dramatically in the third quarter, the company said Tuesday.
Northwest Airlines Corp. (NWA) lost $224 million, or $2.91 per share, compared with year-earlier earnings of $290.3 million, or $2.53 per share. Revenue fell 31 percent to $1.98 billion from $2.81 billion a year ago.
The numbers were significantly lower than even the gloomy $1.11 per share loss expected by First Call analysts.
"Our third quarter was very disappointing," said John H. Dasburg, NWA president and CEO. "Our operations were severely impacted by the cooling-off period and the strike and by the disruptions that accompany such events. As a result, we lost business through avoidance and because we failed to deliver the quality of service our customers expect and deserve."
During the quarter, NWA was hit by the mandated 30-day cooling-off period leading up to the pilot strike, the 18-day strike itself and a 7-day recovery period afterward. In total, the company said it lost an estimated $630 million due to the strike, as well as a retroactive $84 million applying to the third quarter for labor compensation.
Negotiations continue in an attempt to repair strained relationships between management and both the International Association of Machinists and the International Brotherhood of Teamsters, the company said.
CEO Dasburg added that "continued weakness in Asia" had further impact on the carrier's performance in the quarter.
Separately, NWA confirmed would-be air ally Continental Airlines' (CAL) Monday statement that the companies expect discussions with the U.S. Justice Department to end soon.
"If the parties are unable to reach agreement, the company anticipates that the Justice Department will file a lawsuit challenging the transactions. Should that happen, NWA expects implementation of its global alliance with Continental will be delayed."
NWA stock (NWAC) fell 9/16 to 26-5/8 in early consolidated trading on the New York Stock Exchange. 
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