---

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002

Commission file number 0-23642

LOGO

NORTHWEST AIRLINES CORPORATION(Exact name of registrant as specified in its charter)

Delaware

41-1905580(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)2700 Lone Oak Parkway, Eagan, Minnesota

55121(Address of principal executive offices)

(Zip Code)


(612) 726-2111Registrant's telephone number, including area code

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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý    No o

As
of March 31, 2002, there were 85,762,745 shares of the registrant's Common Stock outstanding.

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Northwest Airlines Corporation

|                              |                                                                                                                                                                                         |                                                                                             |                                                                                       | Page No.
|----------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | --------
|PART I. FINANCIAL INFORMATION |                                                                                                                                                                                         |                                                                                            
|                              | Item 1.                                                                                                                                                                                 |                                                                                             | Financial Statements                                                                  |         
|                              |                                                                                                                                                                                         | Condensed Consolidated Statements of OperationsThree months ended March 31, 2002 and 2001. |                                                                                       | 3       
|                              |                                                                                                                                                                                         | Condensed Consolidated Balance SheetsMarch 31, 2002 and December 31, 2001.                 |                                                                                       | 4       
|                              |                                                                                                                                                                                         | Condensed Consolidated Statements of Cash FlowsThree months ended March 31, 2002 and 2001. |                                                                                       | 5       
|                              |                                                                                                                                                                                         | Notes to Condensed Consolidated Financial Statements                                        |                                                                                       | 6       
|                              | The Computations of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges and Preferred Stock Requirements are attached hereto and filed as Exhibits 12.1 and 12.2. |                                                                                             |                                                                                      
|                              | Item 2.                                                                                                                                                                                 |                                                                                             | Management's Discussion and Analysis of Financial Condition and Results of Operations |         
|                              | Item 3.                                                                                                                                                                                 |                                                                                             | Quantitative and Qualitative Disclosures About Market Risk                            |         
|PART II. OTHER INFORMATION    |                                                                                                                                                                                         |                                                                                            
|                              | Item 1.                                                                                                                                                                                 |                                                                                             | Legal Proceedings                                                                     |         
|                              | Item 6.                                                                                                                                                                                 |                                                                                             | Exhibits                                                                              |         
|SIGNATURE                     |                                                                                                                                                                                         | 16                                                                                         
|EXHIBIT INDEX                 |                                                                                                                                                                                         | 17                                                                                         

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Northwest Airlines Corporation        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                         |                                                              | Three Months Ended
March 31  |     
|------------------------ | ------------------------------------------------------------ | ---------------------------- | ----
|
|
|Operating Revenues       |                                                              |                              |     
|                         | Passenger                                                    |                              | $   
|                         | Cargo                                                        |                              |     
|                         | Other                                                        |                              |     
|                         |                                                              |                              |     
|                         |                                                              | Total operating revenues     |     
|Operating Expenses       |                                                              |                              |     
|                         | Salaries, wages and benefits                                 |                              |     
|                         | Aircraft fuel and taxes                                      |                              |     
|                         | Selling and marketing                                        |                              |     
|                         | Aircraft maintenance materials and repairs                   |                              |     
|                         | Depreciation and amortization                                |                              |     
|                         | Other rentals and landing fees                               |                              |     
|                         | Aircraft rentals                                             |                              |     
|                         | Other                                                        |                              |     
|                         |                                                              |                              |     
|                         |                                                              | Total operating expenses     |     
|                         |                                                              |                              |     
|Operating Loss           |                                                              |                              | (196
|Other Income (Expense)   |                                                              |                              |     
|                         | Interest expense, net                                        |                              |     
|                         | Interest of mandatorily redeemable preferred security holder |                              |     
|                         | Investment income                                            |                              |     
|                         | Other                                                        |                              |     
|                         |                                                              |                              |     
|                         |                                                              | Total other income (expense) |     
|                         |                                                              |                              |     
|Loss Before Income Taxes |                                                              |                              | (261
|Income tax benefit       |                                                              |                              | (90 
|                         |                                                              |                              |     
|Net Loss                 |                                                              | $                            | (171
|                         |                                                              |                              |     
|Loss per common share:   |                                                              |                              |     
|                         | Basic                                                        |                              | $   
|                         |                                                              |                              |     
|                         | Diluted                                                      |                              | $   
|                         |                                                              |                              |     

See
accompanying notes.

3

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Northwest Airlines Corporation        CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                              |                                                                    | March 31
2002                                        |       | December 31
2001 |       
|------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ---------------------------------------------------- | ----- | ---------------- | ------
|
|Assets                                                                                                        |                                                                    |                                                      |       |                  |       
|Current Assets                                                                                                |                                                                    |                                                      |       |                  |       
|                                                                                                              | Cash and cash equivalents                                          |                                                      | $     | 2,476            |       
|                                                                                                              | Restricted short-term investments                                  |                                                      |       | 155              |       
|                                                                                                              | Accounts receivable, net                                           |                                                      |       | 595              |       
|                                                                                                              | Flight equipment spare parts, net                                  |                                                      |       | 261              |       
|                                                                                                              | Prepaid expenses and other                                         |                                                      |       | 435              |       
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total current assets                                 |       |                  | 3,922 
|Property and Equipment                                                                                        |                                                                    |                                                      |       |                  |       
|                                                                                                              | Flight equipment, net                                              |                                                      |       | 5,291            |       
|                                                                                                              | Other property and equipment, net                                  |                                                      |       | 1,024            |       
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total property and equipment                         |       |                  | 6,315 
|Flight Equipment Under Capital Leases, net                                                                    |                                                                    |                                                      | 537   |                  |       
|Other Assets                                                                                                  |                                                                    |                                                      |       |                  |       
|                                                                                                              | Intangible pension asset                                           |                                                      |       | 943              |       
|                                                                                                              | International routes, net                                          |                                                      |       | 634              |       
|                                                                                                              | Investments in affiliated companies                                |                                                      |       | 228              |       
|                                                                                                              | Other                                                              |                                                      |       | 747              |       
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total other assets                                   |       |                  | 2,552 
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total Assets                                         |       | $                | 13,326
|                                                                                                              |                                                                    |                                                      |       |                  |       
|Liabilities and Stockholders' Equity (Deficit)                                                                |                                                                    |                                                      |       |                  |       
|Current Liabilities                                                                                           |                                                                    |                                                      |       |                  |       
|                                                                                                              | Air traffic liability                                              |                                                      | $     | 1,519            |       
|                                                                                                              | Accounts payable and other liabilities                             |                                                      |       | 2,157            |       
|                                                                                                              | Current maturities of long-term debt and capital lease obligations |                                                      |       | 401              |       
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total current liabilities                            |       |                  | 4,077 
|Long-Term Debt                                                                                                |                                                                    |                                                      | 5,371 |                  |       
|Long-Term Obligations Under Capital Leases                                                                    |                                                                    |                                                      | 399   |                  |       
|Deferred Credits and Other Liabilities                                                                        |                                                                    |                                                      |       |                  |       
|                                                                                                              | Pension and postretirement benefits                                |                                                      |       | 1,883            |       
|                                                                                                              | Deferred income taxes                                              |                                                      |       | 914              |       
|                                                                                                              | Other                                                              |                                                      |       | 568              |       
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total deferred credits and other liabilities         |       |                  | 3,365 
|Mandatorily Redeemable Preferred Security of Subsidiary Which Holds Solely Non-Recourse Obligation of Company |                                                                    |                                                      | 486   |                  |       
|Redeemable Preferred Stock                                                                                    |                                                                    |                                                      | 226   |                  |       
|Common Stockholders' Equity (Deficit)                                                                         |                                                                    |                                                      |       |                  |       
|                                                                                                              | Common stock                                                       |                                                      |       | 1                |       
|                                                                                                              | Additional paid-in capital                                         |                                                      |       | 1,456            |       
|                                                                                                              | Accumulated deficit                                                |                                                      |       | (689             | )     
|                                                                                                              | Accumulated other comprehensive income (loss)                      |                                                      |       | (306             | )     
|                                                                                                              | Treasury stock                                                     |                                                      |       | (1,060           | )     
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total common stockholders' equity (deficit)          |       |                  | (598  
|                                                                                                              |                                                                    |                                                      |       |                  |       
|                                                                                                              |                                                                    | Total Liabilities and Stockholders' Equity (Deficit) |       | $                | 13,326
|                                                                                                              |                                                                    |                                                      |       |                  |       

See
accompanying notes.

4

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Northwest Airlines Corporation        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                       |                                                                    | Three Months Ended
March 31                         |      
|------------------------------------------------------ | ------------------------------------------------------------------ | --------------------------------------------------- | -----
|
|
|Net Cash Provided by (Used in) Operating Activities    |                                                                    | $                                                   | (176 
|Cash Flows From Investing Activities                   |                                                                    |                                                     |      
|                                                       | Capital expenditures                                               |                                                     |      
|                                                       | Net increase in short-term investments                             |                                                     |      
|                                                       | Proceeds from sale of investment in Continental Airlines, Inc.     |                                                     |      
|                                                       | Other, net                                                         |                                                     |      
|                                                       |                                                                    |                                                     |      
|                                                       |                                                                    | Net cash provided by (used in) investing activities |      
|Cash Flows From Financing Activities                   |                                                                    |                                                     |      
|                                                       | Proceeds from issuance of short-term borrowings and long-term debt |                                                     |      
|                                                       | Payments of long-term debt and capital lease obligations           |                                                     |      
|                                                       | Other, net                                                         |                                                     |      
|                                                       |                                                                    |                                                     |      
|                                                       |                                                                    | Net cash provided by (used in) financing activities |      
|Increase (Decrease) in Cash and Cash Equivalents       |                                                                    |                                                     | (36  
|Cash and cash equivalents at beginning of period       |                                                                    |                                                     | 2,512
|                                                       |                                                                    |                                                     |      
|Cash and cash equivalents at end of period             |                                                                    | $                                                   | 2,476
|                                                       |                                                                    |                                                     |      
|Available to be borrowed under credit facilities       |                                                                    | $                                                   | 1    
|                                                       |                                                                    |                                                     |      
|Supplemental Cash Flow Information:                    |                                                                    |                                                     |      
|                                                       | Interest paid                                                      |                                                     | $    
|                                                       | Income taxes refunded                                              |                                                     |      
|Investing and Financing Activities Not Affecting Cash: |                                                                    |                                                     |      
|                                                       | Manufacturer financing of aircraft predelivery deposits            |                                                     | $    

See
accompanying notes.

5

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Northwest Airlines Corporation        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



2002

$
1792003


1882004


5372005


1,3552006


484


2002

2001Domestic

$
1,555

$
1,801Pacific, principally Japan


435


567Atlantic


190


243Total operating revenues

$
2,180

$
2,611


6

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2002

2001Numerator:Net income (loss)

$
(171
)
$
(171
)Denominator:Weighted-average shares outstanding for basic earnings (loss) per share


85,481,219


83,441,702Effect of dilutive securities:Series C Preferred Stock





Shares held in non-qualified rabbi trusts





Employee stock options





Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings (loss) per share


85,481,219


83,441,702






7

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(in millions except
per share amounts)Net Income:Reported net income (loss)

$
(171
)Add back: Goodwill amortization(1)


Add back: International route amortization


6Adjusted net income (loss)

$
(165
)Earnings per share:(2)Reported net income (loss)

$
(2.05
)Add back: Goodwill amortization(1)


Add back: International route amortization


0.07Adjusted net income (loss)

$
(1.98
)






Northwest

Other
Subsidiaries

Consolidating
Adjustments

NWA Corp.
ConsolidatedOperating revenues

$
2,027

$
213

$
(60
)
$
2,180Operating expenses


2,229


204


(57
)

2,376Operating income (loss)


(202
)

9


(3
)

(196
)Other income


(80
)

(494
)

509


(65
)Income before income taxes


(282
)

(485
)

506


(261
)Income tax expense


(102
)

12





(90
)Net income

$
(180
)
$
(497
)
$
506

$
(171
)


8

---



Northwest

Other
Subsidiaries

Consolidating
Adjustments

NWA Corp.
ConsolidatedNet cash from operating activities

$
(360
)
$
184

$


$
(176
)Net cash flows from investing activities


(360
)

(30
)




(390
)Net cash flows from financing activities


660


(130
)




530Increase in cash and cash equivalents


(60
)

24





(36
)Cash and cash equivalents at beginning of period


2,471


41





2,512Cash and cash equivalents at end of period

$
2,411

$
65

$


$
2,476




Northwest

Other
Subsidiaries

Consolidating
Adjustments

NWA Corp.
ConsolidatedAssetsCurrent AssetsCash, cash equivalents and restricted short-term investments

$
2,506

$
125

$


$
2,631Accounts receivable, net


576


19





595Other current assets


543


177


(24
)

696Total current assets


3,625


321


(24
)

3,922Property and Equipment


5,983


332





6,315Flight Equipment Under Capital Leases, net


537








537Other Assets


2,351


1,678


(1,477
)

2,552Total Assets

$
12,496

$
2,331

$
(1,501
)
$
13,326Liabilities and Stockholders' EquityCurrent LiabilitiesAir traffic liability

$
1,464

$
64

$
(9
)
$
1,519Accounts payable and other liabilities


2,077


95


(15
)

2,157Current maturities of long-term debt and capital lease obligations


375


26





401Total current liabilities


3,916


185


(24
)

4,077Long-Term Debt and Capital Lease Obligations


5,521


249





5,770Deferred Income Taxes





914





914Other Liabilities


2,462


31


(42
)

2,451Mandatorily Redeemable Preferred Security


486








486Redeemable Preferred Stock





226





226Common Stockholders' Equity


111


726


(1,435
)

(598
)Total Liabilities and Stockholders' Equity

$
12,496

$
2,331

$
(1,501
)
$
13,326


9

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

For the quarter ended March 31, 2002, the Company reported a net loss of $171 million and an operating loss of $196 million. The net loss per
common share was $2.01 in the first quarter of 2002 compared with a net loss per common share of $2.05 in the first quarter of 2001.

In
the first quarter of 2001, the Company recorded a non-recurring, pre-tax charge for retroactive pay and benefits of $94 million related to the
collective bargaining agreement reached with the Aircraft Mechanics Fraternal Association ("AMFA"), the union which represents the Company's mechanics, cleaners and custodians, and a gain of
$27 million on the sale of the Company's remaining investment in Continental Airlines, Inc. ("Continental").

Substantially
all of the Company's results of operations are attributable to Northwest and the following discussion pertains primarily to Northwest. The Company's results of operations
for interim periods are not necessarily indicative of the results for an entire year due to seasonal factors as well as competitive and general economic conditions. The Company's second and third
quarter operating results have historically been more favorable due to increased leisure travel on domestic and international routes during the spring and summer months.

Information
with respect to the Company's operating statistics follows(1):

|                                                         |                                             | Three months ended
March 31 |        |        |       
|-------------------------------------------------------- | ------------------------------------------- | --------------------------- | ------ | ------ | ------
|
|Scheduled service:                                       |                                             |                             |        |        |       
|                                                         | Available seat miles (ASM) (millions)       |                             | 21,762 |        | 24,987
|                                                         | Revenue passenger miles (millions)          |                             | 16,536 |        | 18,266
|                                                         | Passenger load factor (percent)             |                             | 76.0   |        | 73.1  
|                                                         | Revenue passengers (thousands)              |                             | 11,899 |        | 13,364
|                                                         | Yield per revenue passenger mile (cents)    |                             | 10.61  |        | 11.86 
|                                                         | Passenger revenue per scheduled ASM (cents) |                             | 8.07   |        | 8.67  
|Operating revenue per total ASM (cents)(2)               |                                             | 8.86                        |        | 9.46   |       
|Operating expense per total ASM (cents)(2)               |                                             | 9.65                        |        | 9.95   |       
|Operating expense per total ASM, fuel neutral (cents)(2) |                                             | 10.20                       |        | 9.95   |       
|Cargo ton miles (millions)                               |                                             | 480                         |        | 540    |       
|Cargo revenue per ton mile (cents)                       |                                             | 30.90                       |        | 34.11  |       
|Fuel gallons consumed (millions)                         |                                             | 445                         |        | 512    |       
|Average fuel cost per gallon, excluding fuel tax (cents) |                                             | 58.75                       |        | 87.55  |       
|Number of operating aircraft at end of period            |                                             | 434                         |        | 429    |       
|Full-time equivalent employees at end of period          |                                             | 45,005                      |        | 53,341 |       

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10

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Results of OperationsThree months ended March 31, 2002 and 2001

Operating Revenues.Operating revenues decreased 16.5% ($431 million). System passenger revenues decreased 19.0%
($412 million), excluding Pinnacle Airlines. The decrease in system passenger revenues was primarily attributable to a 12.9% decrease in scheduled service ASMs and a 6.9% decrease in
passenger revenues per ASM ("RASM"). System passenger load factor increased 2.9 points to 76.0% for the three months ended March 31, 2002. Pinnacle Airlines passenger revenues increased 58.5%
($24 million) to $65 million due to increased capacity from 23 additional Bombardier CRJ aircraft.

The
following analysis by region is based on information reported to the Department of Transportation and excludes Pinnacle Airlines:

|                               |                                   | System  |   | Domestic |       | Pacific |       | Atlantic |   
|------------------------------ | --------------------------------- | ------- | - | -------- | ----- | ------- | ----- | -------- | --
|2002                           |                                   |         |   |          |       |         |       |          |   
|                               | Passenger revenues (in millions)  |         | $ | 1,755    |       | $       | 1,253 |          | $ 
|Increase (Decrease) from 2001: |                                   |         |   |          |       |         |       |          |   
|                               | Passenger revenues (in millions)  |         |   | (412     | )     |         | (262  | )        |   
|                               |                                   | Percent |   |          | (19.0 | )%      |       | (17.3    | )%
|                               | Scheduled service ASMs (capacity) |         |   | (12.9    | )%    |         | (10.2 | )%       |   
|                               | Passenger load factor             |         |   | 2.9      | pts.  |         | 1.4   | pts.     |   
|                               | Yield                             |         |   | (10.5    | )%    |         | (9.7  | )%       |   
|                               | Passenger RASM                    |         |   | (6.9     | )%    |         | (7.9  | )%       |   

Domestic
passenger revenues decreased primarily due to lower capacity and yields, partially offset by a higher passenger load factor. The Company continued to experience the effects of
the September 11, 2001 terrorist attacks and a continuing decline in corporate business and leisure travel, which adversely impacted yields.

Pacific
passenger revenues decreased primarily due to lower capacity and yields, partially offset by a higher passenger load factor. Capacity was reduced as a result of the
September 11, 2001 terrorist attacks and the weakened Asian economy. Yields were also lower due to the weakness in the Asian economy and the weak yen. The average yen per U.S. dollar exchange
rates for the three months ended March 31, 2002 and 2001 were 134 and 116, respectively, a 13.2% weakening in the buying power of the yen from the prior year.

Atlantic
passenger revenues decreased primarily due to lower capacity and yields. Capacity and yields were lower due to the September 11, 2001 terrorist attacks but were partially
offset by an increase in passenger load factor.

Cargo
revenues decreased 20% ($37 million) to $148 million due to a 9.4% decrease in cargo revenue yield per ton mile and 11.1% fewer cargo ton miles resulting from reduced
U.S. demand for Asian goods and the weakened yen exchange rate. Other revenue decreased 1.8% ($4 million) due primarily to decreased revenue from MLT, Inc.

Operating Expenses.Operating expenses decreased 16.5% ($471 million). Operating capacity was reduced 12.8% to
21.82 billion total service ASMs due primarily to the September 11, 2001 terrorist attacks. Operating expense per total ASM decreased 3.0% excluding the $94 million
provision for AMFA retroactive pay and benefits in the first quarter of 2001.

Salaries,
wages and benefits decreased 12.2% ($128 million) due to a decrease in average full-time equivalent employees of 15.6% and a 2001 provision for retroactive
wages and benefits related to the AMFA collective bargaining agreement. This decline was offset by higher wages and pension benefits due to the new AMFA contract and higher pension expenses resulting
from a lower actuarial discount

11

---

rate. Aircraft fuel and taxes decreased 39.4% ($189 million) due to a 32.9% decrease in the average fuel cost per gallon, including a $15 million gain from hedging transactions, and
13.1% fewer gallons consumed as a result of fewer ASMs and the use of more fuel efficient aircraft. Selling and marketing (consisting of commissions, credit card fees, computer reservation
system fees, advertising and promotion expenses) decreased 22.7% ($64 million) due to lower revenues system wide and most notably in the Pacific where commission rates are higher. Aircraft
maintenance materials and repairs decreased 25.6% ($50 million) as a result of lower repair volume in 2002 due to retirements and removal from service of older aircraft as well as higher
third-party engine and airframe repairs in the first quarter of 2001. Depreciation and amortization increased 5.5% ($7 million) due to additional owned aircraft partially offset by the
elimination of international route amortization. Other expenses
declined 9.3% ($44 million) largely due to decreased personnel expenses and a reduced level of passenger food service offset by higher insurance costs.

Other Income and Expense.Other non-operating expense increased 75.7% ($28 million) primarily due to
higher interest expense related to increased debt levels and lower interest income as a result of lower interest rates. A $27 million gain from the sale of the Company's remaining shares of
Continental recorded in 2001 was offset by higher earnings from affiliates and a gain from a litigation settlement in 2002.

Liquidity and Capital Resources

At March 31, 2002, the Company had cash, cash equivalents and restricted short-term investments of $2.63 billion. This amount includes
$155 million of restricted short-term investments, resulting in total liquidity of $2.48 billion.

Net
cash used in operating activities for the three months ended March 31, 2002 was $176 million, a $339 million decrease from the $163 million cash provided
from operating activities for the three months ended March 31, 2001. The decrease in cash provided from operating activities is due primarily to the payment of aviation taxes deferred between
September 11, 2001 and January 15, 2002 and other changes in working capital, including a repayment of $61 million outstanding under the NWA Funding, LLC revolving facility.

Investing
activities in the first quarter of 2002 consisted primarily of the purchase of six Airbus A319 aircraft and one Boeing 747-400 aircraft, costs to commission
aircraft before entering revenue service, aircraft modifications and aircraft deposits. Investing activities in the first quarter of 2001 consisted primarily of the proceeds of $450 million
from the January sale of 6.7 million shares of Continental Class A Common Stock held by the Company and the subsequent sale of the remaining shares of Continental Class B Common
Stock held by the Company for $132 million, partially offset by the purchase of four Airbus A319 aircraft, costs to commission aircraft before entering revenue service, aircraft modifications
and aircraft deposits.

Financing
activities in the first quarter of 2002 consisted primarily of the issuance of $300 million of 9.875% unsecured notes due 2007, the financing of six Airbus A319 aircraft
and one Boeing 747-400 aircraft with escrowed funds from pass-through certificate offerings, and payment of debt and capital lease obligations. Financing activities in the
first quarter of 2001 consisted primarily of the Company's draw of $1.10 billion under its credit facilities, the financing of four Airbus A319 aircraft with escrowed funds from
pass-through certificate offerings, and payment of debt and capital lease obligations. At March 31, 2002, $620 million of unused pass-through trust certificate
proceeds were held in escrow and are not assets or direct obligations of, or guaranteed by, the Company and therefore are not included in the condensed consolidated balance sheets. The unused
pass-through trust certificate proceeds are available to finance a portion of the aircraft scheduled for delivery in 2002.

In
February 2002, the Metropolitan Airport Commission ("MAC") refinanced its debt used for the sale and leaseback of various company assets in 1992. The Company's imputed interest
rate on the debt

12

---

related to this sale-leaseback transaction has been reduced from 9.9% to 8.458% as a result of the MAC's refinancing.

In
addition to the purchased aircraft discussed above, the Company took delivery of five Bombardier CRJ aircraft during the three months ended March 31, 2002. These aircraft were
financed with operating leases.

The
current aircraft delivery schedule provides for the acquisition of 93 aircraft over the next five years. See Note 5 to the Condensed Consolidated Financial Statements for
additional discussion of aircraft capital commitments.

Other Information

Labor Agreements.Approximately 91% of the Company's employees are members of collective bargaining units. At
March 31, 2002, all of the Company's union workers were under contract.

The
Company's collective bargaining agreement with the Air Line Pilots Association ("ALPA") becomes amendable on September 13, 2002. The Company and ALPA reached a tentative
agreement on April 27, 2002 to extend the current collective bargaining agreement through September 12, 2003. The tentative agreement includes a pay increase of 4.5 percent on
September 13, 2002 and a second pay increase of 5.5 percent on September 12, 2003. The Company and ALPA also agreed to begin contract talks in January 2003, with the mutual
goal of achieving a new agreement by September 2003. The tentative agreement was approved by the ALPA Master Executive Council on April 30, 2002, and is subject to membership
ratification.

Foreign Currency.The Company is exposed to the effect of foreign currency exchange rate fluctuations on the U.S. dollar
value of foreign currency-denominated operating revenues and expenses. The Company's largest exposure comes from the Japanese yen. The Company's effective average yen per U.S. dollar exchange rate,
including hedge activity for the three months ended March 31, 2002 and 2001 was 117 and 103, respectively. From time to time, the Company uses financial instruments to hedge its exposure to the
Japanese yen. As of March 31, 2002, the Company has recorded $33 million of unrealized gains in accumulated other comprehensive income (loss) associated with forward contracts
purchased to hedge a portion of its 2002 yen-denominated sales. Hedging gains or losses are recorded in revenue when transportation is provided. During the quarter ended March 31,
2002, the Company realized pre-tax gains of $8 million associated with forward contracts purchased to hedge its first quarter yen-denominated sales. At March 31,
2002, the Company has hedged approximately 63% of its anticipated yen-denominated sales at an average rate of 114 yen per U.S. dollar for the remainder of 2002.

Forward-Looking Statements.Certain of the statements made throughout Management's Discussion and Analysis of Financial
Condition and Results of Operations are forward-looking and are based upon information available to the Company on the date hereof. The Company through its management may also from time to time make
oral forward-looking statements. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is hereby identifying important factors that could
cause actual results to differ materially from those contained in any forward-looking statement made by or on behalf of the Company. Any such statement is qualified by reference to the following
cautionary statements.

It
is not reasonably possible to itemize all of the many factors and specific events that could affect the outlook of an airline operating in the global economy. Such risks and
uncertainties include, among others, the future level of air travel demand, the Company's future load factors and yields, the airline pricing environment, increased costs for security, the cost and
availability of aviation insurance coverage and war risk coverage, the general economic condition of the U. S. and other regions of the world, the price and availability of jet fuel, labor
negotiations both at other carriers and the Company, low-fare

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carrier expansion, capacity decisions of other carriers, actions of the U.S. and foreign governments, foreign currency exchange rate fluctuation, inflation and other factors discussed herein.
Additional information with respect to these factors and these and other events that could cause differences between forward-looking statements and future actual results is contained in Item1. "Risk
Factors Related to Northwest and NWA Corp." and "Risk Factors Related to the Airline Industry" in the Company's Annual Report on Form 10-K for the year ended December 31,
2001.

Developments
in any of these areas, as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings, could cause the
Company's results to differ from results that have been or may be projected by or on behalf of the Company. The Company cautions that the foregoing list of important factors is not inclusive. The
Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements deal with the
Company's expectations about the future and are subject to a number of factors that could cause actual results to differ materially from the Company's expectations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information required by this item is provided under the caption "Foreign Currency" within "Management's Discussion and Analysis of Financial Condition and Results
of Operations" in this Quarterly Report on Form 10-Q. Also see "Item 7a. Quantitative and Qualitative Disclosures About Market Risk" in the Company's Annual Report on
Form 10-K for 2001.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Reference is made to "Item 3. Legal Proceedings" in the Company's Annual Report on Form 10-K for 2001. In addition, in the ordinary course of
its business, the Company is party to various other legal actions which the Company believes are incidental to the operation of its business. The Company believes that the outcome of the proceedings
to which it is currently a party will not have a material adverse effect on the Company's consolidated financial statements taken as a whole.

Item 6. Exhibits





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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized this 15th day of May 2002.

| |  | NORTHWEST AIRLINES CORPORATION
| |  | ------------------------------
| |  | By                            

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                        
|----------- |  | -----------------------------------------------------------------------------------
|12.1        |  | Computation of Ratio of Earnings to Fixed Charges.                                 
|12.2        |  | Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Requirements.

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