As its stock traded 15.2 percent higher Wednesday, Northwest Airlines reported the not-so-good news of its $377 million net loss for the second quarter, CNNMoney.com reports. The company cited escalating oil costs as the primary reason for the loss, which was steeper in comparison to the second quarter of 2007.
The airline said fuel costs increased by $637 million when compared to the year before and that it paid $3.45 per gallon of jet fuel in the second quarter, compared to $2.04 per gallon in the same period last year. However, the airline did report $250 million in savings from successfully hedging fuel prices.
The numbers were released just after Northwest announced earlier in the month that it was cutting its workforce and adding baggage fees, as well as eliminating a few international flights. The airline also stated that it expects to reduce its capacity by 8.5-to-9.5 percent by the fourth quarter.
"The unprecedented rise in fuel prices has had an adverse effect on our
second-quarter results," Northwest Chief Executive Doug Steenland told reporters in a telephone conference. He added that the airline is prepared to meet the obstacle of higher fuel
prices, considering the upcoming merger with Delta Air Lines that is expected to
close in the fourth quarter.