Paul Lewis/WASHINGTON DC
At a critical point in its history, Northwest Airlines has lost long-time president and chief executive John Dasburg, who has quit to take the top job with fast food giant Burger King. Northwest's new management faces an immediate challenge in the form of a looming strike by the carrier's mechanics, and a long-term issue in repositioning the airline for the impending consolidation of the US air transport industry.
Dasburg, 58, had led Minneapolis-based Northwest on a rollercoaster ride of successes and setbacks since taking the helm in November 1990. He is succeeded as CEO by former chief operating officer Richard Anderson, 46, and as president by former chief corporate officer Doug Steenland, 49.
The pair face a tough task from the outset, with Northwest - the country's fourth largest carrier by sales and traffic - likely to be one of the big losers should the planned United Airlines/US Airways and American Airlines/Trans World Airlines mergers go ahead. The "super-carriers" so-formed will control 50% of the US market, while Northwest's own partner Continental Airlines could respond by attempting to merge with Delta Air Lines.
Ironically, Northwest had pioneered the airline alliance concept with its tie-up with KLM, launched more than 10 years ago, but was thwarted in its bid to establish a global alliance when regulators blocked its move to take a controlling stake in Continental.
The latter's bid to block American's purchase of TWA, alleging an unfair auction process, was thrown out of court last week.
Continental had been contemplating a $400 million offer of its own for TWA, but American's may now be the only offer when the bidding closes on 28 February.
Northwest retains a veto that would prevent a take-over of Houston-based Continental by the larger Delta, but could not block a bid for Delta by Continental, the cost of which CEO Gordon Bethune says he has already assessed.
A more immediate problem facing Northwest concerns the 10,000-strong Aircraft Mechanics Fraternal Association, which may strike from 12 March. The date marks the end of a cooling-off period imposed by the US National Mediation Board.
With a strike also looming at Delta, Washington may yet establish a Presidential Emergency Board, giving Northwest further breathing space.
Northwest last suffered a major strike in 1998, when its pilots walked out for two weeks - costing it $1.3 billion.
Source: Flight International
