December 5, 2007

AVIATION: Cargo services pondered

Northwest Airlines Corp., Michigan's largest passenger air carrier, is considering what to do with its cargo business after it loses its largest customer, DHL Express, next year.

Northwest's fleet of 14 Boeing 747 freighters makes it the only U.S. carrier with dedicated cargo aircraft.

Chief Financial Officer Dave Davis told analysts Tuesday that Northwest's flying for DHL will end late next year.

"It's fairly significant. DHL was our largest cargo customer," he said.

Davis said Northwest may have to shrink the cargo business, which was lagging even with DHL.

He said selling the business is unlikely because it relies on Northwest's licenses to fly to additional destinations from its Tokyo hub. That freedom, which only Northwest and United have among U.S. carriers, can't be divided between Northwest and a spun-off cargo operation, he said.

Davis also said Northwest is looking at selling its frequent-flier program.

"Our hypothesis is that there is possibly substantial value there," he said.