Northwest Airlines Corporation lost $377 million in the second quarter after a net non-cash impairment charge of $547 million and a $250 million gain on fuel hedges.

The results are in an entirely different range from the $2.1 billion net income in the prior year quarter, which included $1.9 billion in reorganization items.

Before adjusting the airline's true valuation with the impairment charge, net income would have been $170 million in the second quarter, lower than but comparable to net income of $205 million before reorganization items last year. Northwest's operating revenue for the second quarter rose to $3.6 billion, up 12.4 percent from last year.

Cargo revenue gained 7.1 percent from $198 million to $212 million, mostly on surcharges. Actual cargo tonnage fell 9.1 percent from 505 ton-miles to 459 ton-miles.

Fuel hedges protected Northwest from a 69 percent jump in jet fuel costs from $2.04 per gallon to $3.45 in the year since June 30, 2007. Northwest's total fuel costs, excluding out-of-period hedge gains, increased by $637 million versus the prior year.

"The unprecedented run-up in oil prices continues to pose great challenges for Northwest Airlines and the entire airline industry," said Doug Steenland, president and chief executive officer. "In response, we have acted swiftly to reduce capacity, preserve liquidity, aggressively manage our costs and grow revenue through fare actions and additional fees and charges."

Among the higher fees, NWA Cargo will raise its fuel surcharges for all domestic shipments from 48 cents to 52 cents per pound, effective Aug. 1.

As a result of flight reductions, Northwest is reducing its frontline and management personnel by 2,500. All Northwest employee groups will be affected, the company said.