Northwest CEO Doug Steenland during the company’s earnings conference call
said
that the airline is weighing spinning out its frequent flier program as a
separate company. Northwest’s comments echo those of UAL Corp. and AMR Corp.,
with the latter
under
pressure from shareholder FL Group hf to use asset sales to boost its
flagging share price.
Steenland said he would only consider a spinoff “if you came to the conclusion
that it would not hurt the airline, that the airline would continue to have a
competitive meaningful program to attract its most loyal frequent
fliers.”
Frequent flier programs are a hot discussion item in the airline business
right now, as airlines have taken notice of a successful spinout by Air Canada
Inc. in 2005. Steenland said that the Air Canada spinoff “does clearly provide
value,” seemingly proving the concept of a spinout.
While frequent flier programs and perhaps regional subsidiaries could be up
for sale, don’t expect Northwest’s cargo operation to be put on the block.
Northwest officials said that the landing rights they use to deliver cargo to
closed markets such as China are linked to the rights to fly passengers into
those markets, making a separation very complicated. — Lou Whiteman
Hear
a replay of Northwest's earnings call
See
TheDeal.com story about FL Group pressuring AMR
See
TheDeal.com story about Air Canada
