Northwest: $100 oil to lead to mergers

photo by caribb

Oil, which has been hitting record highs seemingly every day now, has always been a problem for airlines. But when the price of oil starts getting above $100, it becomes a really big problem. On a pre-recorded telephone message for Northwest employees, CEO Doug Steenland said that oil was becoming a "serious budget-breaker". "If fuel remains where it is today, our increased fuel costs will again create a difficult financial challenge for the airline... This rapid increase in fuel is one reason we continue to believe consolidation in the industry is inevitable." Meanwhile, Northwest's merger talks with Delta are currently in hiatus while pilots unions at both airlines try to figure out how to combine their seniority lists.