Northwest Airlines earned US$244 million in net income for the third quarter, its first full reporting period out of bankruptcy protection, significantly reversing a net loss of US$1.2 billion in the year-ago quarter when it was operating under Chapter 11.

President and CEO Doug Steenland hailed the "remarkable turnaround" and said the "strong performance makes it possible for us to continue to invest in the airline so that we can enhance shareholder value." One possible way of growing shareholder value, he said, is to spin off the WorldPerks frequent-flier program.

"Clearly this is worthy of further analysis," he told analysts and reporters on Oct. 29. "You would only spin it off if you came to the conclusion that it would not hurt the airline ... If you look at the results of [Air Canada's] Aeroplan and what Qantas is considering, it clearly does drive value. We're giving [it] a look."

Third-quarter revenue dropped 0.9% to US$3.38 billion owing to a planned reduction in flying to cope with operational challenges as well as problems in the cargo sector. Expenses decreased 4% to US$2.92 billion, producing operating income of US$459 million, a 25.4% increase over US$366 million in the year-ago quarter. NWA said its third-quarter net income excluding reorganization items and taxes was US$405 million, up 57% over US$258 million earned on similar basis in the 2006 quarter.

Mainline traffic was flat at 19.2 billion RPMs on a 0.9% dip in capacity to 22.03 million ASMs, producing a load factor of 87.2%, up 1 point. Passenger yield improved 0.6% to 13.41 cents as PRASM lifted 1.9% to 11.7 cents and CASM fell 2% to 10.76 cents. CASM ex-fuel was flat at 7.3 cents.

Executives said there is room for improvement in NWA's cargo business, which saw a 16.5% decline in revenue to US$212 million in the quarter. It is the only US international carrier operating freighters, with 12 747-200Fs focused mainly on transpacific activity. It is taking "very substantial actions" including opening an "in-route" line maintenance facility in Anchorage, and said it is "evaluating an alternative freighter solution" that may comprise either new or converted aircraft.