Review of Logistics ArticleThe article “Northwest Raises Fares and Fees, Cuts Flights in Bid to Offset Rising Fuel Cost” by Kathy Schwiff discusses negative changes in Northwest Airlines. In particular, the author analyzes high fees, soaring fuel costs and trimming back stressing that the company is going to increase baggage fees, airfares and fuel surcharges. One more negative moment is that Northwest Airlines cuts domestic flights schedule by 5% and, therefore, it won’t hire additional pilots. Company’s goal is to decrease non-aircraft expenditures. However, who will suffer? It goes without saying that every businessmen who depends on airlines will suffer as he will spend more money on each flight.
Northwest Airlines claim that through costs reduction, revenue enhancements and productivity increase it would be able to generate profit of about $100 million annually. For example, Doug Steenland, Chief Executive of Northwest Airlines, argue that “the plan includes revenues enhancements, capacity and fleet reductions in capital and operating expense… we will not be going back to our employees to pay cuts”. I think that such statement is promising for employees, but such changes can’t be implemented not affecting anyone. When everything seems reasonable on the surface, it is necessary to look deeper and something negative will be found. For example, the author writes that the oil prices have been increased and, of course, it will lead to increase in prices.
Each customer will have to pay additional $25 for two bags and $100 for three and more. All these measures are taken to maximize liquid positions of Northwest Airlines, as they claim.The information provided affects logistics as the author discusses such logistics changes as increased transportation fees, charges, changes in oil prices, and cutting domestic flight schedule. Of course, airline logistics is affected as less people would be able afford such fees and they may choose other transportation means. Moreover, other airline companies are also going to increase fees and to cut costs.