Northwest Cuts Fares as It Resumes Flights

ST. PAUL, Minn. — Northwest Airlines Corp. lowered its fares as it resumed operations Wednesday after settling a pilots strike, helping to trigger a round of price cuts throughout the industry.

The fourth-largest U.S. airline said 430 flights, or about 25% of its service, were back in operation. The airline plans to have all flights back in the air by Monday.

The St. Paul-based airline also cut its seven-day advance fares systemwide by $10 to $20 below its 14-day advance fare. The move, made Monday, coincided with a cut by UAL Corp.’s United Airlines, and other carriers have since followed suit.

“The driving reason for Northwest’s fare cuts is to get people back on their airplanes,” said Michael Boyd, president of Aviation Systems Research, a Golden, Colo.-based consulting company. Other airlines were forced to act as the industry moves into a slower season.

Carriers including AMR Corp.’s American Airlines, Delta Air Lines Inc., Continental Airlines Inc. and Trans World Airlines Inc. matched the seven-day advance fare cuts on key Northwest routes. They also matched the 14-day advance purchase prices elsewhere.

United, the No. 1 U.S. airline, is Northwest’s biggest competitor, particularly in the upper Midwest U.S. and in Asia. Chicago-based United is also seen as the carrier that benefited most from the Northwest strike.

The strike is expected to add about $37 million to United’s third-quarter earnings, according to PaineWebber Inc. analyst Samuel Buttrick.

Northwest had been shut down since Aug. 28, when its 6,200 pilots walked off the job in search of higher wages and better work rules. It normally operates 1,700 flights a day.

The process of restarting flights could cost as much as $25 million a day, the company told analysts shortly after the strike began. That’s in addition to the $12 million to $15 million in daily expenses and $25 million in lost revenue incurred by the airline during the strike.

Northwest shares fell $1.19 to close at $29.63 on Nasdaq; UAL fell $1.13 to $71.75 on the New York Stock Exchange.