updated 4/30/2007 4:08:46 PM ET 2007-04-30T20:08:46

Northwest Airlines Corp., nearing the end of its bankruptcy reorganization, reported a $292 million first-quarter loss on Monday, all of it due to reorganization expenses.

The loss was an improvement from its $1.1 billion loss during the same period last year. Northwest said it would have made $100 million for the quarter ended March 31 if not for its $393 million in reorganization expenses. A year ago it would have lost $129 million if not for reorganization items.

Revenue for the quarter dipped slightly to $2.87 billion, down from $2.89 billion a year ago. But operating expenses dropped more — 8 percent — as Northwest won new labor agreements and cut back regional flying as it reorganized. First-quarter fuel prices slid 5.4 percent, and labor costs dropped 9 percent. Northwest’s payments to regional carriers dropped 42 percent as it renegotiated its agreement with Pinnacle Airlines Corp. and bought out bankrupt regional carrier Mesaba Aviation Inc.

While domestic passenger revenue rose just 3.4 percent to $1.42 billion, the airline saw strong revenue growth on its overseas flights. Passenger revenue over the Pacific rose 12 percent to $515 million, and revenue over the Atlantic rose 24 percent to $272 million.

Passenger revenue rose 7.5 percent from a year ago, to $2.2 billion.

Chief Financial Officer Neal Cohen said it was the first time Northwest has turned a first-quarter profit sine 1998, not counting unusual items.

“While we are optimistic as we look forward, we are seeing some softening in domestic revenue and we remain concerned about the impact of fuel price increases,” he said.

He said Northwest ended the quarter with about $2.4 billion in cash, plus another $543 million in restricted cash.

“Our first quarter results met our expectations as compared to the business plan. The year-over-year comparisons clearly indicate that the restructuring actions that have been accomplished over the past 19 months are positioning Northwest Airlines for long-term profitability,” Chief Executive Doug Steenland said.

Steenland repeated Northwest’s plan to emerge from bankruptcy protection in June. It filed for Chapter 11 protection on Sept. 14, 2005, the same day as Delta Air Lines Inc. Delta emerged from Chapter 11 on Monday.

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