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(AP) - Northwest Airlines has matched a major fare
increase by Continental and United, and signaled that
belt-tightening measures are on the way, too.

      Oil has been lingering above $100 a barrel, pushing up the cost
of jet fuel. Doug Steenland, chief executive of Northwest Airlines
Corp., said at those prices the airline will spend $1.7 billion
more on fuel than it expected when it emerged from bankruptcy in
May.

      Last week UAL Corp.'s United Airlines and Continental Airlines
Inc. raised some round-trip fares as much as $50. Now Northwest has
matched.


      "Airfares have to go up, and our passengers will need to pay
more. Airlines simply cannot absorb these cost increases,"
Steenland told workers in a hot line message recorded over the
weekend.

      Higher prices will result in fewer passengers, Steenland said,
and the size of the airline will need to reflect that.


      "First we have to tighten our belt. We need to find ways to
preserve cash by reducing capital expenditures and operating costs.
Fortunately, we have over $3 billion of cash on hand."

      Steenland did not elaborate on what cost-saving measures he had
in mind, and spokeswoman Tammy Lee declined to expand on
Steenland's comments.

      Northwest shares dropped 90 cents, or 9.5 percent, to $8.60 on
Monday. They've lost half their value since Feb. 20.
      

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Joshua Freed

Author

Northwest Airlines has matched a major fare
increase by Continental and United, and signaled that belt-tightening measures are on the way, too, because of record high oil prices.

Northwest CEO: 'Our passengers will have to pay more.'

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