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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 June 30, 2001

Commission File Number 0-23642

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) 726-2111(Registrant'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 /x/  No / /

At
June 30, 2001, there were 85,224,271 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 and six months ended June 30, 2001 and 2000. |  | 3       
|              |  |                                                                                                                                                                                          |  | Condensed Consolidated Balance SheetsJune 30, 2001 and December 31, 2000.                                |  | 4       
|              |  |                                                                                                                                                                                          |  | Condensed Consolidated Statements of Cash FlowsSix months ended June 30, 2001 and 2000.                  |  | 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                     |  | 12      
|              |  | Item 3.                                                                                                                                                                                  |  | Quantitative and Qualitative Disclosures About Market Risk                                                |  | 17      
|PART II.      |  | OTHER INFORMATION                                                                                                                                                                        |  |                                                                                                          
|              |  | Item 1.                                                                                                                                                                                  |  | Legal Proceedings                                                                                         |  | 18      
|              |  | Item 4.                                                                                                                                                                                  |  | Submission of Matters to a Vote of Security Holders                                                       |  | 18      
|              |  | Item 6.                                                                                                                                                                                  |  | Exhibits                                                                                                  |  | 19      
|SIGNATURE     |  | 20                                                                                                                                                                                      
|EXHIBIT INDEX |  |                                                                                                                                                                                         

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Northwest Airlines Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                  |                                                              | Three Months Ended
June 30   |     | Six Months Ended
June 30 |      
|--------------------------------- | ------------------------------------------------------------ | ---------------------------- | --- | ------------------------ | -----
|
|
|Operating Revenues                |                                                              |                              |     |                          |      
|                                  | Passenger                                                    |                              | $   | 2,362                    |      
|                                  | Cargo                                                        |                              |     | 182                      |      
|                                  | Other                                                        |                              |     | 171                      |      
|                                  |                                                              |                              |     |                          |      
|                                  |                                                              | Total operating revenues     |     |                          | 2,715
|Operating Expenses                |                                                              |                              |     |                          |      
|                                  | Salaries, wages and benefits                                 |                              |     | 970                      |      
|                                  | Aircraft fuel and taxes                                      |                              |     | 476                      |      
|                                  | Aircraft maintenance materials and repairs                   |                              |     | 185                      |      
|                                  | Commissions                                                  |                              |     | 139                      |      
|                                  | Other rentals and landing fees                               |                              |     | 134                      |      
|                                  | Depreciation and amortization                                |                              |     | 130                      |      
|                                  | Aircraft rentals                                             |                              |     | 111                      |      
|                                  | Other                                                        |                              |     | 606                      |      
|                                  |                                                              |                              |     |                          |      
|                                  |                                                              | Total operating expenses     |     |                          | 2,751
|                                  |                                                              |                              |     |                          |      
|Operating Income (Loss)           |                                                              |                              | (36 | )                        |      
|Other Income (Expense)            |                                                              |                              |     |                          |      
|                                  | Interest expense, net                                        |                              |     | (83                      | )    
|                                  | Interest of mandatorily redeemable preferred security holder |                              |     | (7                       | )    
|                                  | Investment income                                            |                              |     | 21                       |      
|                                  | Foreign currency gain (loss)                                 |                              |     | (2                       | )    
|                                  | Other                                                        |                              |     | 15                       |      
|                                  |                                                              |                              |     |                          |      
|                                  |                                                              | Total other income (expense) |     |                          | (56  
|                                  |                                                              |                              |     |                          |      
|Income (Loss) Before Income Taxes |                                                              |                              | (92 | )                        |      
|Income tax expense (benefit)      |                                                              |                              | (37 | )                        |      
|                                  |                                                              |                              |     |                          |      
|Net Income (Loss)                 |                                                              | $                            | (55 | )                        | $    
|                                  |                                                              |                              |     |                          |      
|Earnings (loss) per common share: |                                                              |                              |     |                          |      
|                                  | Basic                                                        |                              | $   | (.65                     | )    
|                                  |                                                              |                              |     |                          |      
|                                  | Diluted                                                      |                              | $   | (.65                     | )    
|                                  |                                                              |                              |     |                          |      

See accompanying notes.

3

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Northwest Airlines Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS

|(Unaudited, in millions)                                                                                      |                                                                    | June 30
2001                               |       | December 31
2000 |       
|------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------ | ----- | ---------------- | ------
|Assets                                                                                                        |                                                                    |                                            |       |                  |       
|Current Assets                                                                                                |                                                                    |                                            |       |                  |       
|                                                                                                              | Cash and cash equivalents                                          |                                            | $     | 1,296            |       
|                                                                                                              | Restricted short-term investments                                  |                                            |       | 54               |       
|                                                                                                              | Accounts receivable, net                                           |                                            |       | 427              |       
|                                                                                                              | Flight equipment spare parts, net                                  |                                            |       | 305              |       
|                                                                                                              | Prepaid expenses and other                                         |                                            |       | 497              |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    | Total current assets                       |       |                  | 2,579 
|Property and Equipment                                                                                        |                                                                    |                                            |       |                  |       
|                                                                                                              | Flight equipment, net                                              |                                            |       | 4,909            |       
|                                                                                                              | Other property and equipment, net                                  |                                            |       | 1,044            |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    | Total property and equipment               |       |                  | 5,953 
|Flight Equipment Under Capital Leases, net                                                                    |                                                                    |                                            | 554   |                  |       
|Other Assets                                                                                                  |                                                                    |                                            |       |                  |       
|                                                                                                              | International routes, net                                          |                                            |       | 646              |       
|                                                                                                              | Investments in affiliated companies                                |                                            |       | 275              |       
|                                                                                                              | Other                                                              |                                            |       | 1,623            |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    |                                            | 2,544 |                  |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    | Total Assets                               |       | $                | 11,630
|                                                                                                              |                                                                    |                                            |       |                  |       
|Liabilities and Stockholders' Equity                                                                          |                                                                    |                                            |       |                  |       
|Current Liabilities                                                                                           |                                                                    |                                            |       |                  |       
|                                                                                                              | Air traffic liability                                              |                                            | $     | 1,667            |       
|                                                                                                              | Accounts payable and other liabilities                             |                                            |       | 2,019            |       
|                                                                                                              | Current maturities of long-term debt and capital lease obligations |                                            |       | 238              |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    | Total current liabilities                  |       |                  | 3,924 
|Long-Term Debt                                                                                                |                                                                    |                                            | 3,467 |                  |       
|Long-Term Obligations Under Capital Leases                                                                    |                                                                    |                                            | 438   |                  |       
|Deferred Credits and Other Liabilities                                                                        |                                                                    |                                            |       |                  |       
|                                                                                                              | Deferred income taxes                                              |                                            |       | 1,164            |       
|                                                                                                              | Pension and postretirement benefits                                |                                            |       | 1,331            |       
|                                                                                                              | Other                                                              |                                            |       | 521              |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    |                                            | 3,016 |                  |       
|Mandatorily Redeemable Preferred Security of Subsidiary Which Holds Solely Non-Recourse Obligation of Company |                                                                    |                                            | 516   |                  |       
|Redeemable Preferred Stock                                                                                    |                                                                    |                                            | 229   |                  |       
|Common Stockholders' Equity                                                                                   |                                                                    |                                            |       |                  |       
|                                                                                                              | Common stock                                                       |                                            |       | 1                |       
|                                                                                                              | Additional paid-in capital                                         |                                            |       | 1,457            |       
|                                                                                                              | Accumulated deficit                                                |                                            |       | (320             | )     
|                                                                                                              | Accumulated other comprehensive income (loss)                      |                                            |       | (13              | )     
|                                                                                                              | Treasury stock                                                     |                                            |       | (1,085           | )     
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    |                                            | 40    |                  |       
|                                                                                                              |                                                                    |                                            |       |                  |       
|                                                                                                              |                                                                    | Total Liabilities and Stockholders' Equity |       | $                | 11,630
|                                                                                                              |                                                                    |                                            |       |                  |       

See accompanying notes.

4

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Northwest Airlines Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                 |                                                                    | Six Months Ended
June 30                            |      
|------------------------------------------------ | ------------------------------------------------------------------ | --------------------------------------------------- | -----
|
|
|Net Cash Provided by Operating Activities        |                                                                    | $                                                   | 259  
|Cash Flows From Investing Activities             |                                                                    |                                                     |      
|                                                 | Capital expenditures                                               |                                                     |      
|                                                 | Net (increase) decrease in short-term investments                  |                                                     |      
|                                                 | Other, net                                                         |                                                     |      
|                                                 |                                                                    |                                                     |      
|                                                 |                                                                    | Net cash used in investing activities               |      
|Cash Flows From Financing Activities             |                                                                    |                                                     |      
|                                                 | Proceeds from issuance of short-term borrowings and long-term debt |                                                     |      
|                                                 | Proceeds from sale and leaseback transactions                      |                                                     |      
|                                                 | Payments of long-term debt and capital lease obligations           |                                                     |      
|                                                 | Payment of short-term borrowings                                   |                                                     |      
|                                                 | Other, net                                                         |                                                     |      
|                                                 |                                                                    |                                                     |      
|                                                 |                                                                    | Net cash provided by (used in) financing activities |      
|Increase in Cash and Cash Equivalents            |                                                                    |                                                     | 603  
|Cash and cash equivalents at beginning of period |                                                                    |                                                     | 693  
|                                                 |                                                                    |                                                     |      
|Cash and cash equivalents at end of period       |                                                                    | $                                                   | 1,296
|                                                 |                                                                    |                                                     |      
|Available to be borrowed under credit facilities |                                                                    | $                                                   | 1,122
|                                                 |                                                                    |                                                     |      

See accompanying notes.

5

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Northwest Airlines Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Three Months Ended
June 30

Six Months Ended
June 302001

2000

2001

2000Domestic

$
1,855

$
1,917

$
3,655

$
3,667Pacific, principally Japan


549


653


1,116


1,214Atlantic


311


315


555


513Total operating revenues

$
2,715

$
2,885

$
5,326

$
5,394


6

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Three Months Ended
June 30

Six Months Ended
June 302001

2000

2001

2000Numerator:Net income (loss) (in millions)

$
(55
)
$
115

$
(226
)
$
118Denominator:Weighted-average shares outstanding for basic earnings per share


84,379,477


82,477,999


83,913,180


82,303,209Effect of dilutive securities:Series C Preferred Stock





7,004,327





7,037,718Shares held in non-qualified rabbi trusts





2,218,706





2,357,231Employee stock options and unvested restricted shares





476,982





334,223Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share


84,379,477


92,178,014


83,913,180


92,032,381




7

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Condensed Consolidating Statements of Operations for the three months ended June 30 (in millions):

Northwest

Other
Subsidiaries

Consolidating
Adjustments

NWA Corp.
Consolidated2001:Operating revenues

$
2,597

$
161

$
(43
)
$
2,715Operating expenses


2,633


158


(40
)

2,751Operating income (loss)


(36
)

3


(3
)

(36
)Other income (expense)


(67
)

(156
)

167


(56
)Income (loss) before income taxes


(103
)

(153
)

164


(92
)Income tax expense (benefit)


(35
)

(2
)




(37
)Net income (loss)

$
(68
)
$
(151
)
$
164

$
(55
)2000:Operating revenues

$
2,796

$
143

$
(54
)
$
2,885Operating expenses


2,540


144


(51
)

2,633Operating income (loss)


256


(1
)

(3
)

252Other income (expense)


(71
)

366


(356
)

(61
)Income before income taxes


185


365


(359
)

191Income tax expense


71


5





76Net income

$
114

$
360

$
(359
)
$
115


8

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Condensed Consolidating Statements of Operations for the six months ended June 30 (in millions):

Northwest

Other
Subsidiaries

Consolidating
Adjustments

NWA Corp.
Consolidated2001:Operating revenues

$
5,074

$
360

$
(108
)
$
5,326Operating expenses


5,356


343


(101
)

5,598Operating income (loss)


(282
)

17


(7
)

(272
)Other income (expense)


(134
)

(685
)

726


(93
)Income (loss) before income taxes


(416
)

(668
)

719


(365
)Income tax expense (benefit)


(149
)

10





(139
)Net income (loss)

$
(267
)
$
(678
)
$
719

$
(226
)2000:Operating revenues

$
5,191

$
330

$
(127
)
$
5,394Operating expenses


4,938


326


(119
)

5,145Operating income


253


4


(8
)

249Other income (expense)


(93
)

382


(343
)

(54
)Income before income taxes


160


386


(351
)

195Income tax expense


65


12





77Net income

$
95

$
374

$
(351
)
$
118


9

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Condensed Consolidating Balance Sheets as of June 30, 2001 (in millions):

Northwest

Other
Subsidiaries

Consolidating
Adjustments

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

$
1,278

$
72




$
1,350Accounts receivable, net


413


14





427Other current assets


662


189


(49
)

802Total current assets


2,353


275


(49
)

2,579Property and Equipment


5,602


351





5,953Flight Equipment Under Capital Leases, net


554








554Other Assets


2,278


3,988


(3,722
)

2,544Total Assets

$
10,787

$
4,614

$
(3,771
)
$
11,630Liabilities and Stockholders' EquityCurrent LiabilitiesAir traffic liability

$
1,617

$
57

$
(7
)
$
1,667Accounts payable and other liabilities


1,986


76


(43
)

2,019Current maturities of long-term debt and capital lease obligations


213


25





238Total current liabilities


3,816


158


(50
)

3,924Long-Term Debt and Capital Lease Obligations


3,633


272





3,905Deferred Income Taxes





1,164





1,164Other Liabilities


1,837


66


(51
)

1,852Mandatorily Redeemable Preferred Security


516








516Redeemable Preferred Stock





229





229Common Stockholders' Equity


985


2,725


(3,670
)

40Total Liabilities and Stockholders' Equity

$
10,787

$
4,614

$
(3,771
)
$
11,630


10

---

Condensed Consolidating Statements of Cash Flows for the six months ended June 30 (in millions):

Northwest

Other
Subsidiaries

Consolidating
Adjustments

NWA Corp.
Consolidated2001:Net cash from operating activities

$
205

$
54

$


$
259Net cash flows from investing activities


(598
)

582


(3
)

(19
)Net cash flows from financing activities


982


(622
)

3


363Increase in cash and cash equivalents


589


14





603Cash and cash equivalents at beginning of period


659


34





693Cash and cash equivalents at end of period

$
1,248

$
48

$


$
1,2962000:Net cash from operating activities

$
601

$
89

$


$
690Net cash flows from investing activities


(168
)

(10
)

(2
)

(180
)Net cash flows from financing activities


(117
)

(75
)

2


(190
)Increase in cash and cash equivalents


316


4





320Cash and cash equivalents at beginning of period


735


14





749Cash and cash equivalents at end of period

$
1,051

$
18

$


$
1,069


11

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

For the quarter ended June 30, 2001, the Company reported a net loss of $55 million and an operating loss of $36 million. Loss per common
share was $.65 compared with diluted earnings per common share of $1.26 for the second quarter of 2000. The Company experienced continuing softness in business traffic caused by weak U.S. and Asian
economies that have continued to negatively impact corporate travel and yields industry-wide. As a result, the Company expects to reduce third and fourth quarter 2001 capacity growth by
approximately one and five percentage points, respectively, from earlier projections and has implemented measures to defer discretionary and other non-operationally critical spending as it
focuses on improving financial performance.

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 June 30 |        |       |        | Six months ended June 30 |      |        |       
|---------------------------------------------------------------------------------------------- | ------------------------------------------- | -------------------------- | ------ | ----- | ------ | ------------------------ | ---- | ------ | ------
|
|
|Scheduled service:                                                                             |                                             |                            |        |       |        |                          |      |        |       
|                                                                                               | Available seat miles (ASM) (millions)       |                            | 26,233 |       | 26,134 |                          | 0.4  |        | 51,220
|                                                                                               | Revenue passenger miles (millions)          |                            | 20,447 |       | 20,835 |                          | (1.9 | )      | 38,713
|                                                                                               | Passenger load factor (percent)             |                            | 77.9   |       | 79.7   |                          | (1.8 | ) pts. | 75.6  
|                                                                                               | Revenue passengers (thousands)              |                            | 15,049 |       | 15,334 |                          | (1.9 | )      | 28,412
|                                                                                               | Yield per revenue passenger mile (cents)    |                            | 11.31  |       | 12.04  |                          | (6.1 | )      | 11.65 
|                                                                                               | Passenger revenue per scheduled ASM (cents) |                            | 8.82   |       | 9.60   |                          | (8.1 | )      | 8.80  
|Operating revenue per total ASM (cents)(2)                                                     |                                             | 9.52                       |        | 10.26 |        | (7.2                     | )    | 9.49   |       
|Operating expense per total ASM (cents)(2)                                                     |                                             | 9.55                       |        | 9.24  |        | 3.4                      |      | 9.93   |       
|Operating expense excluding provision for AMFA retro pay and benefits per total ASM (cents)(2) |                                             |                            |        |       |        |                          |      | 9.75   |       
|Cargo ton miles (millions)                                                                     |                                             | 568                        |        | 631   |        | (10.0                    | )    | 1,108  |       
|Cargo revenue yield per ton mile (cents)                                                       |                                             | 32.11                      |        | 33.23 |        | (3.4                     | )    | 33.09  |       
|Fuel gallons consumed (millions)                                                               |                                             | 545                        |        | 533   |        | 2.2                      |      | 1,057  |       
|Average fuel cost per gallon, excluding fuel tax (cents)                                       |                                             | 81.71                      |        | 79.68 |        | 2.5                      |      | 84.54  |       
|Number of operating aircraft at end of period                                                  |                                             |                            |        |       |        |                          |      | 438    |       
|Full-time equivalent employees at end of period                                                |                                             |                            |        |       |        |                          |      | 52,997 |       

---

Results of OperationsThree months ended June 30, 2001 and 2000

Operating loss was $36 million in 2001 compared with operating income of $252 million in 2000. A decrease in revenue of $170 million was
primarily caused by sluggish U.S. and Asian economic

12

---

conditions that have continued to negatively impact corporate travel and yields industry-wide. Increases in operating expenses of $118 million are due primarily to higher wages and
benefits, aircraft maintenance and fuel prices.

Operating Revenues.Operating revenues decreased 5.9% ($170 million). System passenger revenues (excluding
Express revenues of $48 million and $27 million for the three months ended June 30, 2001 and 2000, respectively) decreased 7.8% ($195 million). The decrease in system
passenger revenue was primarily attributable to a 6.1% decrease in yield and a 1.9% decrease in revenue passenger miles ("RPM"), resulting in a 8.1% decrease in passenger revenue per scheduled ASM
("RASM").

The
following analysis by market is based on information reported to the Department of Transportation ("DOT") and excludes Express:

|                               |                                   | System  |   | Domestic |        | Pacific |       | Atlantic |    |       |       
|------------------------------ | --------------------------------- | ------- | - | -------- | ------ | ------- | ----- | -------- | -- | ----- | ------
|2001                           |                                   |         |   |          |        |         |       |          |    |       |       
|                               | Passenger revenue (in millions)   |         | $ | 2,314    |        | $       | 1,608 |          | $  | 432   |       
|Increase (Decrease) from 2000: |                                   |         |   |          |        |         |       |          |    |       |       
|                               | Passenger revenue (in millions)   |         |   | (195     | )      |         | (98   | )        |    | (86   | )     
|                               |                                   | Percent |   |          | (7.8   | )%      |       | (5.8     | )% |       | (16.6 
|                               | Scheduled service ASMs (capacity) |         |   | 0.4      | %      |         | 1.1   | %        |    | (4.2  | )%    
|                               | Passenger load factor             |         |   | (1.8     | ) pts. |         | (2.3  | ) pts.   |    | (0.1  | ) pts.
|                               | Yield                             |         |   | (6.1     | )%     |         | (3.9  | )%       |    | (12.9 | )%    
|                               | Passenger RASM                    |         |   | (8.1     | )%     |         | (6.8  | )%       |    | (12.9 | )%    

Domestic
passenger revenue decreased due to lower yields and passenger load factor partially offset by a modest increase in capacity. Growth in capacity was restricted, to a large
extent, by the reconfiguration of first class seating. Northwest continued to experience the impact of a slowing U.S. economy in the second quarter, with an associated decline in corporate travel,
which has adversely affected yields and revenues.

Pacific
passenger revenue decreased due to lower yields and capacity. The introduction of a reconfigured World Business Class product, which improved seat pitch from 48 inches to 60
inches and eliminated international first class, is the primary reason for the decline in capacity. The average yen per U.S. dollar exchange rates for the three months ended June 30, 2001 and
2000 were 123 and 107, respectively, a 13% weakening of the yen. In response to the significant decline in Pacific revenue, beginning in September, the Company will suspend flights between Osaka and
the following cities: Seattle, Kuala Lumpur, Kaohsiung, Los Angeles and Manila.

Atlantic
passenger revenue decreased due to a decline in yield and passenger load factor partially offset by an increase in capacity. The increased capacity has been a result of
additional flying, including increases in both Detroit and Minneapolis/St. Paul-Amsterdam service and the initiation of Miami-Amsterdam service, partially offset by the World Business
Class product reconfiguration. Effective October 28, 2001 the Company will seasonally suspend its Detroit-Rome service.

Cargo
revenue decreased 13.3% ($28 million) to $182 million due to a 3.4% decrease in cargo revenue yield per ton mile and 10% fewer cargo ton miles, resulting from
reduced U.S. demand for Asian goods and the weakened yen exchange rate. Service began in July 2001 under a new five-year agreement with DHL Worldwide Express to provide daily
freighter service from its U.S. hub operations in Cincinnati to various points in Asia. The Company's eleventh and twelfth freighters have been placed in revenue service to support this agreement.
Other revenue increased 23% ($32 million) due primarily to increased revenue from MLT Inc., KLM joint venture alliance settlements and frequent flyer program partnership revenue.

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Operating Expenses.Operating expenses increased 4.5% ($118 million). Operating capacity increased .4% to
26.26 billion total service ASMs due to planned capacity increases. Operating expense per total ASM increased 3.4%.

Salaries,
wages and benefits rose 8.1% ($73 million) due to wage rate and benefit increases and a slight increase in average full-time equivalent employees.
Aircraft fuel and taxes increased 5.3% ($24 million) due primarily to a 2.5% increase in average fuel cost per gallon and a 2.2% increase in fuel gallons used. Aircraft maintenance materials
and repairs increased 15.6% ($25 million) as a result of a higher level of scheduled work within the routine engine and airframe maintenance cycle. Commissions decreased by 21.5%
($38 million) primarily due to lower passenger revenue and a lower percentage of commissionable transactions. Depreciation and amortization increased 6.6% ($8 million) due to additional
owned aircraft. Aircraft rentals increased 5.7% ($6 million) due to additional leased aircraft.

Other Income and Expense.Other non-operating expense decreased by $5 million, primarily due to
higher investment income.

Results of OperationsSix months ended June 30, 2001 and 2000

Operating loss was $272 million in 2001 compared with operating income of $249 million in 2000. A decrease in revenue of $68 million was
primarily caused by weaker U.S. and Asian economic conditions that have negatively impacted corporate travel and yields industry-wide. Increases in operating expenses of
$453 million are due primarily to additional wage and benefit costs, higher fuel prices and increases in aircraft maintenance costs.

Operating Revenues.Operating revenues decreased 1.3% ($68 million). System passenger revenues (excluding
Express revenues of $89 million and $52 million for the six months ended June 30, 2001 and 2000, respectively) decreased 2.8% ($132 million). The decrease in system
passenger revenues was primarily attributable to a decrease in yield of 3.1% and a decrease in the passenger load factor of .6 points, resulting in a 3.9% decrease in RASM.

The
following analysis by market is based on information reported to the DOT and excludes Express:

|                               |                                   | System  |   | Domestic |        | Pacific |       | Atlantic |   
|------------------------------ | --------------------------------- | ------- | - | -------- | ------ | ------- | ----- | -------- | --
|2001                           |                                   |         |   |          |        |         |       |          |   
|                               | Passenger revenue (in millions)   |         | $ | 4,509    |        | $       | 3,147 |          | $ 
|Increase (Decrease) from 2000: |                                   |         |   |          |        |         |       |          |   
|                               | Passenger revenue (in millions)   |         |   | (132     | )      |         | (75   | )        |   
|                               |                                   | Percent |   |          | (2.8   | )%      |       | (2.3     | )%
|                               | Scheduled service ASMs (capacity) |         |   | 1.1      | %      |         | 0.1   | %        |   
|                               | Passenger load factor             |         |   | (0.6     | ) pts. |         | (1.2  | ) pts.   |   
|                               | Yield                             |         |   | (3.1     | )%     |         | (0.8  | )%       |   
|                               | Passenger RASM                    |         |   | (3.9     | )%     |         | (2.4  | )%       |   

Domestic
passenger revenue decreased primarily due to lower yields and passenger load factor. The reconfiguration of first class seating and labor related cancellations both
restricted capacity growth. In the first half of 2001, Northwest experienced a sluggish U.S. economy that has continued to negatively impact corporate travel and yields industry-wide.

Pacific
passenger revenue was lower due to decreased yields and capacity, offset by an increased passenger load factor of 1.6 points. The introduction of a reconfigured World Business
Class product, which improved seat pitch from 48 inches to 60 inches and eliminated international first class, is the

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primary reason for the decline in capacity. The average yen per U.S. dollar exchange rates for the six months ended June 30, 2001 and 2000 were 121 and 107, respectively, a 11.6% weakening of
the yen.

Atlantic
passenger revenue rose due to an increase in capacity that was offset by lower yields and passenger load factor. Capacity increased as a result of new flying, including the
initiation of Miami-Amsterdam service, as well as increases in both Detroit and Minneapolis/St. Paul-Amsterdam service and Amsterdam-India service, but was partially offset by World
Business Class product reconfiguration.

Cargo
revenue decreased 5.2% ($20 million) due to a 7.3% decline in cargo ton miles resulting from reduced U.S. demand for Asian goods, offset by an increase in cargo revenue
yield per ton mile of 2.4%. Other revenue increased 15% ($47 million) due primarily to increased revenue from MLT Inc., KLM joint venture alliance settlements and frequent flyer program
partnership revenue.

Operating Expenses.Operating expenses increased 8.8% ($453 million). Operating capacity increased 1.1% to
51.29 billion total service ASMs due to planned capacity increases. Operating expense per total ASM increased 7.2%.

Salaries,
wages and benefits increased 15.6% ($273 million), due largely to wage rate and benefit increases, which included a non-recurring charge for retroactive
pay and benefits of $94 million related to the Aircraft Mechanics Fraternal Association collective bargaining agreement, and a slight increase in average full-time equivalent
employees. Aircraft fuel and taxes increased 9.8% ($85 million) due primarily to a 6.4% increase in average fuel cost per gallon and a 3.0% increase in fuel gallons used. Aircraft maintenance
materials and repairs increased 14.5% ($48 million) primarily due to a higher level of scheduled work within the routine engine and airframe maintenance cycle. Commissions decreased by 16%
($54 million) primarily due to lower passenger revenue and a lower percentage of commissionable transactions. Depreciation and amortization increased 6.2% ($15 million) due to additional
owned aircraft. Aircraft rentals increased 7.3% ($15 million) due to additional leased aircraft. Other expenses increased 5.1% ($59 million) largely due to higher volume of business for
MLT Inc., increased outside services, personnel and selling and marketing fees.

Other Income and Expense.Other non-operating expense increased $39 million primarily due to a
$58 million gain recorded in 2000 from the sale of a portion of the Company's investment inpriceline.com, partially offset by a
$27 million gain recorded in 2001 on the sale of the Company's remaining investment in Continental Airlines, Inc. ("Continental").

Liquidity and Capital Resources

At June 30, 2001, the Company had cash and cash equivalents of $1.30 billion and borrowing capacity of $1.12 billion under its revolving
credit facilities, providing total available liquidity of $2.42 billion.

Net
cash provided by operating activities for the six months ended June 30, 2001 was $259 million, a $431 million decrease compared with the six months ended
June 30, 2000, due primarily to decreased operational performance.

Investing
activities in the six months ended June 30, 2001 consisted primarily of the January sale of 6.7 million shares of Continental Class A Common Stock held
by the Company for $450 million 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 eight Airbus A319 aircraft, one Boeing 757-200 aircraft, costs to commission aircraft before entering revenue service, aircraft modifications and aircraft deposits. Investing
activities in the six months ended June 30, 2000 consisted primarily of the purchase of seven AVRO RJ85 aircraft and six Airbus A319 aircraft, costs to commission aircraft before entering
revenue service, aircraft modifications and aircraft deposits, partially offset by the sale of a portion of the Company's investment inpriceline.com.

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Financing activities in the six months ended June 30, 2001 consisted primarily of the Company's draw in March and subsequent repayment in May of $1.095 billion under its
revolving credit facilities, the issuance of $300 million of 8.875% unsecured notes due 2006, the financing of eight Airbus A319 aircraft, seven of which were financed with funds from
pass-through certificates and one with long-term bank debt, and the payment of debt and capital lease obligations. Financing activities for the six months ended June 30,
2000 consisted primarily of the sale and leaseback of ten Airbus A319 aircraft and three AVRO RJ85 aircraft and payment of debt and capital lease obligations.

In
addition to the purchased aircraft discussed above, the Company took delivery of ten Bombardier CRJ200 aircraft during the six months ended June 30, 2001. These aircraft
were financed with long-term leveraged operating leases provided by the manufacturer.

In
June 2001, the Company completed an offering of $581 million of pass-through certificates due in 2022 at a blended fixed coupon rate of 7.18% to finance
the acquisition of nine new Airbus A319 aircraft, three new Boeing 757-300 aircraft and two new Boeing 747-400 aircraft scheduled to be delivered from February 2002
through October 2002. In June 2001, the Company completed an offering of $396 million of
floating rate European Enhanced Equipment Trust Certificates due in 2013 at a blended floating rate of 60 basis points over LIBOR (initially set at 4.45%) to finance the acquisition of nine new Airbus
A319 aircraft and five new Airbus A320 aircraft scheduled to be delivered from November 2001 through July 2002.

The
cash proceeds from the two issues of certificates are invested and held in escrow with a depositary bank and enable the Company to finance the acquisition of these aircraft
through secured debt financing. If leveraged leases are obtained for these aircraft, under which the aircraft will be sold and leased back to Northwest, the pass-through certificates will
not be direct obligations of the Company or Northwest.

The
current aircraft delivery schedule provides for the acquisition of 108 aircraft over the next five years, all with committed financing. See Note 5 to the Condensed
Consolidated Financial Statements for additional discussion of aircraft capital and finance commitments.

In
the second quarter, the Company completed two long-term airport bond financings of $136 million and $64 million related to airport improvements in
Minneapolis/St. Paul and Seattle, respectively. These financings were for periods of 25 and 29 years at fixed rates of 7.27% and 7.49%, respectively, and will be recorded as other property and
equipment and long-term obligations under capital leases when the funds are drawn for construction purposes. See Note 8 to the Condensed Consolidated Financial Statements for
additional discussion of airport construction financing.

Other Information

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 June 30, 2001 and 2000 was 102 and 108, respectively. From time to time the Company uses financial instruments to hedge its exposure to
the Japanese yen. As of June 30, 2001, the Company has recorded $49 million, net of tax, of unrealized gains in accumulated other comprehensive income associated with forward contracts
purchased to hedge a portion of its 2001 and 2002 yen-denominated sales at an average forward rate of 100 and 114 yen per dollar, respectively. Hedging gains or losses are recorded in
revenue when transportation is provided. During the three months ended June 30, 2001, the Company realized pre-tax gains of $23 million associated with forward contracts
purchased to hedge its yen-denominated sales. At June 30, 2001, the Company has hedged approximately 43% of its anticipated yen-denominated sales for the remainder of
2001 and 42% of 2002 anticipated

16

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yen-denominated sales, which also represents approximately 100% of the Company's excess of yen-denominated revenues over expenses for each period, respectively.

New Accounting Standards.In June 2001, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 142,Goodwill and Other Intangible Assets. SFAS 142 requires that companies test goodwill and indefinite
lived intangible assets for impairment on an annual basis rather than amortize them. The Company will adopt SFAS 142 in the first quarter of 2002, and as a result, anticipates that it will no
longer amortize its indefinite life intangible assets and goodwill. Amortization of these assets was $24 million in 2000. During 2002, the Company will perform the required impairment tests of
goodwill and indefinite lived intangible assets and therefore, the effect, if any, of these tests on the earnings and financial position of the Company has not yet been determined.

Forward-Looking Statements.Some of the statements made in this section and elsewhere in this report are
forward-looking and are based upon information available to the Company on the date hereof. 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. Some factors that
could significantly impact expected capacity, load factors, revenues, expenses and cash flows include the airline pricing environment, fuel costs, labor negotiations both at the Company and other
carriers, low-fare carrier expansion, capacity decisions of other carriers, actions of the U.S. and foreign governments, foreign currency exchange rate fluctuation, inflation, the general
economic environment in the U.S. and other regions of the world and other factors discussed herein. These and other factors are discussed in "Risk Factors Related to Northwest and NWA Corp." and "Risk
Factors Related to the Airline Industry" in Item 1 of the Company's Annual Report on Form 10-K for 2000.

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" within the Company's Annual Report on
Form 10-K for 2000.

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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 2000. 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 4. Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Stockholders on June 28, 2001. The stockholders of the Company voted on four items at the Annual Meeting. The
first was a proposal to elect ten Common Stock directors, each to serve until the next annual meeting of stockholders. Votes were cast by the holders of the Common Stock as follows:

Nominee

Votes For

Votes WithheldRichard C. Blum

80,269,886

361,650Alfred A. Checchi

80,030,732

600,804John H. Dasburg

71,176,591

9,454,945Doris Kearns Goodwin

77,197,559

3,433,977Dennis F. Hightower

80,298,401

333,135Frederic V. Malek

80,147,195

484,341Walter F. Mondale

79,762,954

868,582V.A. Ravindran

80,289,148

342,388Leo M. van Wijk

73,519,829

7,111,707Gary L. Wilson

80,187,314

444,222


The
second item was the election by the holders of the outstanding Series C Preferred Stock of a slate of three Series C directors, Messrs. Benning, Kourpias and
Ristow, each to serve until the next annual meeting of stockholders. The Series C directors were elected by the following vote:



The
third item was a proposal to approve certain amendments to the 1994 Northwest Airlines Corporation Stock Incentive Plan, which would increase the maximum number of shares of
Common Stock available for issuance, extend the term of the Plan and make certain other changes to the Plan. The amendments were approved as follows:



The
fourth item was a stockholder proposal requesting that a stockholder vote be required for the Company to adopt or maintain a poison pill. The stockholder proposal was not approved
by the stockholders. The vote with respect to the proposal was as follows:



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Item 6. Exhibits

| |  | (a) |  | Exhibits:                    |  |                                                                                    
| |  | --- |  | ---------------------------- |  | -----------------------------------------------------------------------------------
| |  |     |  | 12.1                         |  | Computation of Ratio of Earnings to Fixed Charges.                                 
| |  |     |  | 12.2                         |  | Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Requirements.
| |  | (b) |  | Reports on Form 8-K:        
| |  |     |  | Form 8-K dated May 1, 2001  
| |  |     |  | Form 8-K dated June 5, 2001 
| |  |     |  | Form 8-K dated June 20, 2001

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SIGNATURE

Pursuant to the requirements 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.

|                       | Northwest Airlines Corporation
|---------------------- | ------------------------------
|Dated: August 14, 2001 | 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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