Northwest Airline
Northwest Airlines is the world’s fourth largest airline offering more than 1400 daily departures with hubs in Minneapolis/St. Paul, Detroit, Memphis, Tokyo, Japan and Amsterdam, Holland. With its travel partners, Northwest serves more than 1000 cities in nearly 160 countries on six continents (nwa, 2008).
1990 was a tough year for Northwest Airline. Its public reputation was damaged by conviction of several pilots for driving under the influence of alcohol, and a runway collision of two Northwest jets, killing eight people. Not only that, it was also facing other financial difficulties stemming from a recession, war in the Middle East which sent the oil prices to the roof, and declining in air traveling due to a weak economy (Catlin, 2001). While confronted with such situation, Northwest’s CEO, John H. Dasburg, had a chance to put his skills to the test by intense competition, the need to address critical safety issues and a threat of bankruptcy (“John H. Dasburg, 2001). In order to stay away from bankruptcy, the company knew it needed to embark on some kind of an aggressive cost-cutting plan. It cut services at unprofitable hubs, and seeked concessions from its six unions, even though many of them were already receiving below industry average wage (McCarthy, 1996). It was a risky move on his part. He did not receive much support from old time airline executives. However, he chose to plow ahead with the plans and succeeded. Thanks to the backing of the airline’s employees. He received high praises for the airline and set precedents in handling critical issues in the airline industry (John H. Dasburg, 2001). “Dasburg convinced his unions to take a pay cut in exchange for 30 percent ownership of Northwest. Lenders were persuaded to reschedule the airline's payments. He successfully won concessionary contracts from the pilots, flight attendants, and mechanics which saved the airline from bankruptcy. Northwest rebounded to emerge as...
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