Northwest Airlines reported bankruptcy exit aided net income of $2.32 billion for 2007, a dramatic turnaround from a net loss of $2.86 billion in 2006 when it was operating under Chapter 11 protection. The carrier's 2007 pre-tax income excluding reorganization items was $764 million, a more-than-150% improvement over $301 million on similar terms in the prior year. It posted a fourth-quarter net loss of $8 million, narrowed from a net loss of $267 million in the 2006 period. President and CEO Doug Steenland commented that the pre-tax result was "the third highest in company history" and said he was particularly "satisfied" with fourth-quarter earnings, "which were essentially breakeven [in what is] historically a weak quarter for us," noting that most US airlines had bigger losses in the period. In a conference call with analysts and reporters, he declined to discuss speculation that NWA is in merger talks with Delta Air Lines (ATWOnline, Jan. 17) and said the company continues to evaluate its assets. The WorldPerks frequent-flier program "remains an important potential piece of upside for the carrier" and there is an ongoing process to consider a divesture, Steenland said. He added that the airline's freighter capacity "is going to be down" in 2008 and management will "continue to look at the [cargo] business as a whole and look at what fleet decision we may have to take." NWA is the only US international passenger carrier operating freighters, with 12 747-200Fs focused mainly on transpacific operations, and executives have acknowledged that the sector has been underperforming. Full-year 2007 revenue dipped 0.3% to $12.53 billion while expenses dropped 3.4% to $11.42 billion, producing operating income of $1.1 billion, up 49.2% from $740 million in 2006. Mainline traffic rose 0.4% to 72.92 billion RPMs on a 0.6% lift in capacity to 86.14 billion ASMs, producing a load factor of 84.7%, down 0.1 point. Passenger yield increased 1.7% to 12.93 cents as PRASM escalated 1.5% to 10.94 cents and passenger CASM dropped 1.8% to 10.75 cents. Passenger CASM excluding fuel decreased 2.4% to 7.34 cents. NWA projects that mainline capacity will be flat year-over-year in 2008, with domestic capacity declining 5.5%-6.5% and international ASMs rising 8%-9%. by Aaron Karp