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Customer And Travel Agent Technology to Continue to Offer Ticketing Services

Without Fees

    MINNEAPOLIS, Aug. 24 /PRNewswire-FirstCall/ -- Northwest Airlines
 (Nasdaq:   NWAC) today announced steps to lower its domestic distribution costs
 by aligning them with those of the low-cost carriers it increasingly is
 competing with for today's domestic travelers.  Northwest will offer consumers
 and travel agents options that allow them to choose the level of service they
 desire when purchasing or issuing tickets for travel within the 50 United
 States.
     Domestic tickets issued through Northwest reservations offices in the U.S.
 will now include a "Call Center Ticketing Fee," and domestic tickets issued
 through airports in the U.S. and Canada will include an "Airport Ticketing
 Fee."  In addition, in an effort to better compete with low-cost carriers on
 distribution costs, Northwest will reduce the amount of global distribution
 system (GDS) fees it will absorb on domestic tickets. U.S. and Canada-based
 travel agents issuing domestic tickets through GDSs will incur a new "Shared
 GDS Fee."
     Once fully implemented, the changes are expected to lower Northwest's
 annual domestic distribution costs by approximately $70 million.
     Customers using Northwest's nwa.com Web site and travel agents using
 Northwest's WorldAgent Direct Web site or other technology that bypass GDSs
 will continue to enjoy the convenience of these services without incurring a
 ticketing fee or Shared GDS Fee.
     "More than 70% of Northwest's domestic customers have a low-cost carrier
 option available to them, and low-cost carriers continue to grow at a steady
 pace," said Tim Griffin, executive vice president of marketing and
 distribution.  "Since we compete with low-cost carriers on price, it is
 essential that we take steps to be competitive with them on distribution
 costs, where they currently have a clear cost of business advantage over
 Northwest."
 
     RESERVATIONS, AIRPORT TICKETING FEES
     In an effort to reduce its distribution costs, beginning August 27, 2004,
 Northwest will charge a $5 Call Center Ticketing Fee for each domestic ticket
 purchased through one of the airline's reservations centers in the U.S.  In
 addition, tickets for domestic travel purchased at Northwest airport locations
 in the U.S. and Canada will include a US$10/CAD$13 Airport Ticketing Fee.  The
 charges will be non-refundable, and include domestic WorldPerks frequent flyer
 program award tickets.  The $5 Call Center Ticketing Fee and US$10/CAD$13
 Airport Ticketing Fee will be per ticket, regardless of whether it is one-way
 or roundtrip, for travel within the 50 U.S.
     Domestic tickets, including for WorldPerks frequent flyer award travel,
 obtained through Northwest's http://www.nwa.com Web site will not include the
 Call Center Ticketing Fee or Airport Ticketing Fee.
     Since the fees only apply to new ticket issuance, no fee will be charged
 to discuss a new or existing reservation with an airport customer service
 agent or a telephone reservations sales agent.
     Many low-cost carriers issue a majority of their tickets through their own
 Web sites, providing them with another significant cost advantage.  Also, some
 low-cost carriers charge a fee on tickets issued with the help of its
 reservations call center or airport staff.
 
     SHARED GDS FEE
     Beginning September 1, 2004, Northwest will share part of the GDS expense
 with U.S. and Canada-based travel agencies that use a GDS to issue tickets by
 imposing a US$3.75/CAD$4.75 one-way, US$7.50/CAD$9.50 roundtrip per-ticket
 Shared GDS Fee, on tickets for travel within the 50 U.S.
     Unlike many low-cost carriers, Northwest pays an average of $12.50 for
 each ticket booked through a GDS, and has absorbed 100% of that cost.  In 2003
 alone, Northwest paid approximately $180 million in GDS fees.
     GDSs take a significant portion of the fees that they collect from
 airlines and give back up to one third of them to travel agents as an
 incentive for subscribing to the GDS' services.
     Some low-cost carriers do not sell tickets through GDSs, making their
 product available to travel agents only through distribution outlets with far
 lower costs, such as their own Web sites.
     Since the airline does not incur the same GDS fees on tickets issued
 through Northwest's WorldAgent Direct Web site, developed specifically for
 travel agents, tickets issued through http://www.worldagentdirect.com will not
 incur the Shared GDS Fee.
     In addition, travel agents who issue tickets through lower-cost third
 parties that use technology to bypass GDSs, such as Orbitz's "Supplier Link"
 affiliate agency program, will also not incur the Shared GDS Fee.
 
     Northwest Airlines is the world's fifth largest airline with hubs at
 Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately
 1,500 daily departures. Northwest and its travel partners serve nearly 750
 cities in almost 120 countries on six continents. In 2003, consumers from
 throughout the world recognized Northwest's efforts to make travel easier.
 Northwest's WorldPerks program was named the most popular North American
 frequent flyer program by readers of TIME Asia in the 2003 TIME Readers'
 Travel Choice Awards. A 2003 J.D. Power and Associates study of airports
 ranked Minneapolis/St. Paul and Detroit, home to Northwest's two largest hubs,
 in second and fourth place among large domestic airports in overall customer
 satisfaction.
 
 
                                   Fact Sheet
 
                     Northwest Distribution Cost Reductions
 
      Low-cost carriers have a ticket distribution cost advantage
 
      -- Low-cost carriers sell a higher percentage of tickets over their own
         Internet sites, which have lower distribution costs than other
         purchase outlets.
      -- Independence Air charges $10 roundtrip for purchasing tickets through
         their reservations call centers or at airports.  JetBlue charges $6
         roundtrip.
      -- Some low-cost carriers do not participate or participate at lower-cost
         levels in Global Distribution Systems (GDSs), the systems that enable
         travel agents to sell tickets on multiple airlines.  GDSs charge
         airlines such as Northwest an average $12.50 for each ticket sold via
         their systems.
      -- GDSs take a significant portion of the fees they collect from airlines
         and give it to travel agents as an incentive for subscribing to their
         services.
      -- In 2003, Northwest spent $180 million in GDS fees.
 
      Changes for consumers beginning August 27
 
      -- Customers can continue to obtain paid and WorldPerks frequent flyer
         award tickets for travel within the 50 United States through
         http://www.nwa.com without incurring ticketing fees.
      -- Tickets for travel within the 50 U.S. purchased through U.S.
         reservations offices will include a new $5 (one-way or roundtrip) Call
         Center Ticketing Fee.
      -- Tickets for travel within the 50 U.S. purchased through airport ticket
         counters in the U.S. or Canada will include a new US$10/CAD$13 (one-
         way or roundtrip) Airport Ticketing Fee.
      -- Since the fees only apply to new ticket issuance, no fee will be
         charged to discuss a new or existing reservation with an airport
         customer service agent or a reservations sales agent via the
         telephone.
      -- The fees will be non-refundable.
      -- No fees will be charged on international tickets.
 
      Changes for travel agents beginning September 1
 
      -- Northwest will continue to offer travel agency ticket sales through
         http://www.worldagentdirect.com without any fees.  This Web site was
         introduced in 2002 and designed by Northwest specifically for travel
         agents.
      -- Travel agents using technologies that bypass GDSs to issue their
         tickets will not incur a new "Shared GDS Fee."
      -- U.S. and Canada-based travel agents issuing tickets for travel within
         the 50 U.S. through a GDS will be billed for a new US$3.75/CAD$4.75
         one-way, US$7.50/CAD$9.50 roundtrip, Shared GDS Fee.
      -- Northwest will continue to absorb approximately $5 of the $12.50 in
         charges it incurs, on average, for each domestic ticket issued through
         a GDS.
      -- Like the GDS fees Northwest incurs, the Shared GDS Fee will be non-
         refundable.
 
 

SOURCE  Northwest Airlines