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Northwest cancellations: Will NWA be grounded?

Since it came out of bankruptcy two months ago, Northwest Airlines (NYSE: NWA) has canceled a significant amount of flights because of a pilot shortage. Over 147 Northwest flights were canceled over the past weekend and more than 60 were canceled on Monday. By mid-day today, 30 more were grounded.

While these recent cancellations don't compare to the 1,000 flights that were cut in June, Northwest failed to meet the industry's target of 98.0% completed flights. The numbers are also worse than Northwest's rivals' performances. USA Today reported that Northwest's 76 cancellations Sunday totaled 5.6% of the day's flights. In comparison, American Airlines (NYSE: AMR) cut six flights, United Airlines (NASDAQ: UAUA) canceled 33 and Delta (NYSE: DAL) cut four. All provide more daily flights than Northwest.

The leaders of the Air Line Pilots Association said Northwest management laid off too many pilots during its reorganization and scheduled too aggressively coming out of bankruptcy to show better projections for revenue. A Northwest spokesman said the union warned management earlier in the year of the pilot shortages, but was ignored. USA Today said that management conceded that their schedules had been too aggressive, but they also noted an "unusually high rate of pilot absenteeism" in the second half of June.

Northwest management told the Detroit News yesterday that the company was able to get a significant majority of its flights off the ground, and most on time. Tell that to the people whose 60 flights were canceled.

While Northwest's canceled flights continue to pile up, some observers have started to question if the carrier will win its recent request to fly nonstop routes to China. The company was previously turned down for a Detroit-to-China route.

If Northwest doesn't quickly improve its situation, not only will it be on the losing end to China for a second time, but it risks losing its frequent flier and loyalty groups.

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Last updated: December 03, 2008: 12:27 AM

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