Northwest signs preliminary agreement with card processor.

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Northwest Airlines Corp has signed a preliminary agreement to extend its contract for accepting major credit cards through to 2008.

The announcement of the agreement came shortly after Delta Air Lines Inc said

that its current contract for credit cards expires at the end of the month and that it was hard-pressed to find the funds required to get a new one. Contracts are provided by processors that act as go-betweens for the airline and the bank that issued the card, The Associated Press reported. There is however a risk for the processor, which can end up paying back the cost of the ticket if the airline ceases to operate.

In a filing, Northwest reportedly said that it had signed a "definitive term sheet" in July with its processing bank. The airline expects a final agreement in Q3 for a renewal of the current processing agreement that would have expired in April 2006.

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