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Northwest Airlines Corp. Q4 2007 Earnings Call Transcript

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2008-01-29 12:52:59.0

Tags: J.P. Morgan Chase & Co., Call Transcript, Northwest Airlines Corp., Earnings, Corporate Law, Financial Accounting, Investment, Strategy, Business Operations, Finance, Management, Seeking Alpha

Question-and-Answer Session

Operator

Thank you, ladies and gentlemen we’ll now proceed with the analyst portion of the question and answer session. (Operator Instructions) And our first question comes from the line of Jamie Baker with JP Morgan, please proceed.

Jamie Morgan – JP Morgan

Good morning everybody.

Douglas Steenland

Good morning Jamie.

Jamie Baker – JP Morgan

Doug, not withstanding the don’t ask, don’t tell policy on M&A, you did indicate that you expect to close on the Midwest transaction shortly. Is that the same as expecting to receive DOJ approval shortly? And depending on your answer, any color on the anti-trust review process up to this point would be helpful.

Douglas Steenland

We would expect, Jamie, to very shortly clear the DOJ process and upon that occurring we would, PPG with us providing financing assistance would consummate and close the Midwest deal. Getting cleared through the process is what we expected. If this had been another business, I think it probably would have taken less time, but the airline business is, I think always subject to a little bit more scrutiny. But nonetheless it’s our expectation that the deal will not be opposed by the Antitrust Division, in that we will be in a position in a very short period of time to consummate the deal.

Jamie Baker – JP Morgan

Thanks, and could you remind me, in the past you’ve stated a value as to Northwest as to the domestic alliance that you enjoy with Continental and Delta. Can you remind us what you’ve said in the past, and/or quantify Continental’s overall contribution to SkyTeam?

Douglas Steenland

You know, I think Jamie, we’ve given a number in the past, but if I recall correctly it was in the 125 to 200 range, and as the alliance has matured and further developed and really become sort of a baked-in part of our operation, I think it becomes a little more difficult to break out exactly what’s due to Continental and what’s due to something else, as our passengers have really become accustomed to basically seamlessly traveling over that network. But that’s probably as good an estimate as any.

Jamie Baker – JP Morgan

Okay, thank you Doug, I appreciate it.

Operator

And our next question comes from the line of Mike Linenberg from Merrill Lynch, please proceed.

Mike Linenberg – Merrill Lynch

Just back to the comment in the press release, and Doug I think you threw it out as well, where the demand environment at this juncture you’re not seeing any weakness in demand, and I presume that that’s sort of the view over the whole system. If we look at parts of your network more closely, and maybe this is also a question for Tim Griffin, I’m curious, a market like Detroit, local traffic to and from Detroit, what you’re seeing, and sort of as a second part to this question, if you can distinguish or contrast your Pacific, how the TPAC may be doing versus the Interport? The reason I’m focused on the Interport is the Japanese economy is slowing, and we did see some contraction in Singapore, and I’m wondering if you’re seeing stuff there or you’re not seeing as much because you’re de-gauging. You’re taking 400’s out and putting A330s into the market.

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