Northwest Parent’s Net Leaps; Firm Orders 10 Airbus Jets

NEW YORK â€”  NWA Inc., owner of Northwest Airlines, Thursday reported a higher-than-expected fourth-quarter profit--news that caused its shares to rise sharply.

The company also said it has ordered 10 Airbus A330 planes valued at $86 million each, making Northwest Airlines the first North American operators of the large planes, which seat 303 passengers. The planes will be used for service in the North Atlantic and high-volume domestic routes.

The St. Paul, Minn.-based company said its quarterly profit rose to $34 million from $21,000 in the year-ago period. Revenue rose to $1.42 billion from $1.21 billion.

Quarterly sales included a $24-million increase in passenger revenue due to an accounting change.

“It looks like really outstanding numbers,� one trader said. “It obviously helps� the stock, he said.

NWA stock also rose on vague rumors that investors were buying the shares as a prelude to a takeover or to force a restructuring.

Profit Sets Mark

NWA has repeatedly declined to comment on the talk, which started last year after the firm rejected an unsolicited offer from a Japanese developer for real estate owned in Japan.

For the year, NWA profit rose to a record $135.1 million from $103 million. Revenue rose to $5.65 billion from $5.14 billion in the previous year.

“We held domestic capacity down in 1988 to improve customer service and to construct facilities to sustain future growth,� Steven Rothmeier, NWA chairman, said in a statement.

The company will increase capacity at a double digit pace in 1989, Rothmeier said, with growth primarily in transpacific markets, due to acquisition this year of Boeing 747-400s.

Northwest has announced a mid-year international expansion that includes addition of four new routes between the United States and Asia as well as inauguration of service linking Detroit with both Paris and Frankfurt.

Northwest competes mainly with United Airlines and Japan Air Lines in the Pacific--a fast growing market.

The company’s order for the Airbus A330 jets marks the third time it has introduced Airbus planes in North America.

The company said the first Airbus A330 will be delivered in July, 1994, and the remaining nine planes will be delivered by the end of 1994.

Engine Orders Rise

NWA said Pratt & Whitney, a unit of United Technologies, would supply its PW4000 engines for the planes, an order that Pratt & Whitney valued at nearly $250 million.

Pratt & Whitney said it would supply 20 engines plus spares for the 10 twin-engine planes. It said the order from NWA brought the potential value of engine orders and options logged this week to about $1.5 billion.

In 1986, NWA ordered 100 A320 planes from Airbus. The A320 is about half the size of the A330. The first delivery of the planes will be in June, an Airbus spokesman said.

Northwest also has commitments for 20 A340 Airbus jets, which are used for long-range flights. Those planes will be delivered in 1993.