Company Analysis Northwest Airlines Essay Research Paper

Company Analysis: Northwest Airlines

Introduction to Business

BN-1020

Dr. Randall

By, James Academia

Introduction

Northwest Airlines is one of the pioneers in the airline transportation industry and is ranked at the fourth largest air carrier in the United States today. The success of the carrier depends on the quality and reliability of the service at a reasonable price. Close competitors force Northwest to innovate their services by increasing efficiency. This essay will try to examine different perspectives in the services needed to successfully complete the company’s objectives. The analysis will explain historical and financial perspectives that may give a better understanding of the current market trend of the organization.

Services

“Northwest Airlines is engaged principally in the commercial transportation of passengers and cargo.” (5) NWA is a complete full service air transportation carrier that is the forth-largest air carrier in the world that services over 750 destinations located in 120 different countries on 6 continents. They operate 2,600 flights daily around the world and operate more than 200 nonstop between the United States and Asia each week. Headquarters is based in Minneapolis/St. Paul. The main connecting hubs are located at Detroit, Minneapolis, Memphis, and Tokyo. Northwest employs 50,600 employees nationwide as of Dec. 31, 1998. (6) NWA also has 1269 Stockholders as of Feb. 26, 1999. (6) Northwest continues to improve cargo shipping by proudly dedicating 12 Boeing 747 aircraft and easily becoming one of the largest cargo airlines in the world. (4) Cargo is very profitable for Northwest because “Northwest has predicted cargo revenue will top the 900 million mark in 2000”. (3) The enormous fleet of aircraft contains 400 airplanes. (1) Northwest has subsidiaries wholly owned (Unless otherwise indicated by NWA) by Northwest Aircraft, Northwest Aerospace Training corps, MLT Inc, Express Airlines, and Express Airlines I. (6)

History

Northwest Airlines began service on October 1, 1926, flying mail between Minneapolis / St. Paul and Chicago. (2) They started passenger transportation in July 7, 1927. (2) Throughout the years Northwest has grown steadily by acquiring new system routes in the northwestern region of the USA.

The year 1930 was a landmark in history because Northwest moved their home base operation to their present headquarters in St. Paul. The air service grew overnight with the acquisition of Southern Airways in 1936. Northwest’s famous red tail was introduced for the first time on February 1948. The reason why Northwest selected a red tail is because the majority of flights flew over the northern hemisphere. If a flight were to have an accident in snowy surroundings the red tail would easily identify the aircraft.

Expansion efforts continue throughout the system but the largest and most significant expansion happened on January 6, 1986. Northwest agrees to purchase Republic Airways and Northwest employees increased from 17,000 employees to approximately 33,000 over night. Northwest continues to expand service in both European and southeastern Asian countries.

In 1993, KLM Royal Dutch Airlines purchases 51% of Northwest’s common stock making KLM an owner and a code-sharing partner. Northwest finds that code sharing is beneficial towards the coverage of and expansion of their service so northwest acquire alliances with China Air, Continental Airlines, and Alaska Airlines to name a few. Northwest is still looking to expand their service coverage by obtaining new routes.

Opinion

Northwest Airlines has proved that their dedication to superior air service will be their main objective. The mission of the company clearly explains how Northwest’s corporate culture focuses on their main objectives.

“The people of Northwest Airlines will provide reliable, convenient, and

consistent air transportation that meets or exceeds customer expectations

and earns a sustainable profit” (1)

Northwest enforces values and guiding principles into the workers so that the customers and employees can get a full understanding of where the company stands concerning these issues. (1)

Northwest’s Values

1. Safety First

2. Honesty and Integrity

3. Trustworthiness

4. Respect for self, others, and for property

5. Caring

6. Resourcefulness

Guiding Principles

1. Never Compromise Safety

2. Always Emphasize Cleanliness

3. Always put customers first

4. Always support and inspire each other

5. Always strive to Improve

These principles and values form the ideal employee. These positive ideals also create an ideal work environment and maintain high morals and attitudes in the workforce. My experience with Northwest has been very positive. I was able to travel to twelve different countries so far in my career and that alone is such a fulfilling accomplishment by it self. Finally, my expectation for the future of the company is very high. Many different innovations in the operation will propel the organization forward to meet and exceed customer expectation. Moreover, constancy and reliability will not only increase profits, but also, create customer satisfaction.

Financial Statements

Stock Plot

4e0

1. http://www.nwa.com/corpinfo/profin/vision

2. Passages: news letter pg. 3, Volume 4, 6/25/00

3. Traffic World: Krause, Kristen; Issue 13, Vol. 263 pg. 36-37

4. Aviation & Space technology: McGraw-Hill; Issue 7, Vol. 153, pg 8

5. Moody’s Transportation Manual: Mergent; Vol. 7, pg 788, 1999

6. The Valueline Investment Survey: Edition 26, Vol. 26, pg 270