NORTHWEST AIRLINES REPORTS FULL-YEAR PROFIT OF $296 MILLION AND 4TH QUARTER PROFIT OF $31 MILLION, BOTH EXCLUDING NON-RECURRING ITEMS

Results Exceed First Call Estimate for Year, Quarter

Northwest Airlines Corporation (NASDAQ: NWAC) today reported net income, exclusive of the non-recurring items detailed below, of $296 million or $3.21 per diluted common share for the full year ended December 31, 2000. For the three months ended December 31, 2000, Northwest had net income of $31 million or $0.34 per diluted common share, exclusive of the non-recurring items detailed below.

Excluding non-recurring items, the full year and fourth quarter results exceeded the First Call consensus estimates of $3.19 for the full year and $0.31 for the quarter.

In the fourth quarter, Northwest recorded non-recurring, pre-tax charges of $125 million for the anticipated accelerated retirement of a portion of its DC10 fleet and $26 million related to the sale of a portion of the Company’s holdings in Continental Airlines’ common stock. Inclusive of those charges, Northwest reported a net loss of $69 million or $0.84 per basic common share for the fourth quarter and a net profit of $256 million or $2.77 per diluted common share for the full year.

“Northwest enjoyed considerable success in 2000 but we also experienced great challenges,” said John Dasburg, Northwest president and chief executive officer. “We carried more passengers, did more flying and operated more aircraft than at any point in our history. More people work at Northwest Airlines than ever and we worked hard to provide our customers with great service, reliable operations and innovative ways to improve the travel experience. Our alliances and partnerships are strong and produce real benefits for our customers. The people of Northwest will continue in 2001 to provide our customers with superior convenience and reliability.”

Financial Performance

“The fourth quarter was challenging,” said Mickey Foret, Northwest executive vice president and chief financial officer. “Our financial performance was negatively impacted by severe weather and labor disruptions, but despite that we experienced strong revenue performance and we improved earnings year-over-year.”

Total operating revenue for the fourth quarter grew by $185 million or 7.2 percent year-over-year reflecting strong performance from both passenger and cargo operations. Fourth quarter passenger revenue per available seat mile (RASM) increased by 2.5 percent year-over-year. Excluding the effects of higher fuel prices, fourth quarter cost per available seat mile (CASM) increased by 1.1 percent year-over-year.

For the full year, RASM increased 6.6 percent year-over-year while CASM increased 7.1 year-over-year. Full year CASM was strongly impacted by higher fuel costs. Excluding the impact of fuel, CASM for the full year increased only 0.7 percent.

The following table details the year-over-year improvement in passenger revenue, RASM and load factor for each of the airline’s geographic entities for 2000:
 

Northwest ended the year with $693 million in cash and cash equivalents before receipt of the $450 million in cash expected from the sale of Continental stock on January 22, 2001. During the 4th quarter, the airline established a $1.125 billion five-year unsecured line of credit that offers improved flexibility and lower costs. Year-end liquidity totaled $1.81 billion.

Aircraft Orders

Yesterday, Northwest announced that it has reached agreement with The Boeing Company on the purchase of B747-400 and B757-300/–200 aircraft and with Airbus Industrie on the purchase of A330 and A319 aircraft. Under its new delivery schedule, Northwest will acquire 24 Airbus A330-300 aircraft beginning in 2003 and continuing through 2006, 20 Boeing B757-300/-200 aircraft beginning in 2002 and continuing through 2004 and two B747-400 aircraft in 2002.

“These new aircraft are an important part of our commitment to our customers and our people,” said Dasburg. “With this order, we are continuing our investment in our people, in our hubs and other facilities, in new technologies and new aircraft to provide our customers with the most convenient and reliable service.”

Northwest Cargo

In 2000, Northwest Cargo posted the best performance in its history, achieving record-setting performance in revenue, tonnage, yield, number of flights and average load per flight. Cargo revenue for the full year increased 17.1 percent over 1999 results to $857 million while cargo ton miles (CTMs) grew 7.1 percent. As a result, cargo yields increased 9.4 percent over full-year 1999 results.

“Cargo continues to have record-setting revenue performance driven, in part, by improved management of the Pacific network and closer cooperation with KLM on managing trans-Atlantic loads,” said Foret who also serves as president of Northwest Cargo. “Additionally, the launch of our partnership with Japan Airlines Cargo has improved our Pacific network position.”

Since 1999, Northwest Cargo has increased its freighter fleet by 50 percent with the acquisition of four Boeing B747 aircraft. The additional aircraft, two of which entered service in 1999 and two which will enter revenue service in 2001, along with improved trans-Pacific cargo market conditions, are expected to increase Northwest’s 2001 cargo revenue to more than $1 billion for the first time in the Company’s history.

Operations

During the quarter, the airline experienced the negative effect of an illegal job action by its mechanics that began in early November and continued through the end of the year. As a result, Northwest estimates it finished the quarter as the #4 on-time airline among its peer group of the seven largest hub-and-spoke carriers due to a 1st place on-time finish in October, a 3rd place finish in November and a 6th place finish in December. Overall for the year, Northwest expects to finish #2 in on-time performance.

“Our operational accomplishments, which were substantial this year, were achieved by the men and women of Northwest who work at the airports, in the offices, in the planes and in the hangars and I sincerely thank them for their efforts,” said Richard Anderson, Northwest executive vice president and chief operating officer. “These results demonstrate that when we are all working together, with the right tools and training, Northwest is the best operating airline in the country. Our goal this year is to achieve that level of performance day-in, day-out.”

Marketing and E-Commerce Initiatives

Northwest led the industry in technological innovation in 2000, adding new technologies in the air, in the airports and via the Internet to improve its customers’ travel experience. Northwest was the first network carrier to deploy portable agent workstations and rebook hotlines carts to shorten lines and help passengers speed their way through the airport; it installed 227 e-Service Center kiosks in 35 airports across the country and formed with Continental Airlines the largest e-service center network in the industry; Northwest was the first network carrier to make Internet check-in available throughout its domestic system.

The airline also undertook numerous product improvements during 2000, including the acquisition of 30 aircraft and the re-launch of its WorldBusiness Class product featuring a 60-inch pitch and improved service amenities.

Northwest Airlines and KLM announced that they will inaugurate joint nonstop service between Miami and Amsterdam effective April 1, 2001. The daily flight will offer convenient onward connections at Amsterdam to more than 110 destinations in Europe, the Middle East, India and Africa.

Northwest also announced during the quarter that it will expand Minneapolis/St. Paul-Tokyo service from ten weekly flights to twice-daily flights starting April 1, 2001 and that it will increase service between Nagoya and Manila from four weekly flights to daily service beginning April 1, 2001.

On December 1, 2000, Northwest Airlines became the largest airline in the world to offer its customers the unprecedented convenience and speed of Internet check-in throughout its entire domestic system. In the first week of January 2001, Northwest issued its 100,000th boarding pass delivered via the Internet, making Internet check-in the fastest adopted product in Northwest history.

Northwest’s Internet check-in service literally puts the entire check-in process at the passenger’s fingertips, while still offering the functionality of other popular Northwest self-service devices. With Internet check-in, passengers can:

· Print their own boarding pass from their home or office computer

· Change to a different flight or seat

· Enter or change a WorldPerks reservation

· Obtain WorldPerks Elite Card Member upgrades

· Upgrade to First Class with a Northwest E-FirstSM upgrade

Alliances

During the quarter, Northwest and Continental Airlines reached agreement on the sale to Continental of a portion of the Continental common stock held by Northwest and an extension of their alliance agreement through 2025.

“Northwest and Continental have established a strong, long-term alliance that is a great asset for both parties,” said Doug Steenland, Northwest executive vice president and chief corporate officer. “The agreement protects our strategic interests and settles the government’s concerns about our relationship.”

As part of the agreement, Northwest will be issued a special series of Continental preferred stock. That preferred stock will give Northwest the right to block certain business combinations and similar change of control transactions involving Continental and a third party major air carrier during the term of the alliance agreement.

Northwest’s trans-Atlantic partnership with KLM continues to lead the industry as the two airlines continue to operate the world’s deepest, most comprehensive international alliance. During the summer of 2000, Northwest and KLM jointly operated 60 trans-Atlantic flights per day, an all-time record.

During the quarter, Northwest Airlines and Malaysia Airlines announced that they have been granted antitrust immunity by the US Department of Transportation. The approval represents the first immunized alliance between a US and Asian carrier and will provide new benefits for travel between North America and Malaysia.

Safe Harbor

Statements in this news release that are not purely historical facts, including statements regarding our beliefs, expectations, intentions or strategies for the future, may be “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Information with respect to the factors and events that could cause these differences is contained in the Company’s Securities and Exchange Commission filings, including the Company’s Annual Report or Form 10-K for the year ended December 31, 1999. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.