Northwest Will Buy Back KLM’s Stake in Airline

Bad feelings between Northwest Airlines and KLM Royal Dutch Airlines were put aside Wednesday as KLM agreed to sell back its ownership stake in the U.S. carrier for more than $1 billion, more than doubling its initial investment.

The airlines also said they will replace a partnership with long-term contracts to keep the profitable alliance going.

“Northwest and KLM will expand the most successful airline alliance in the industry. Potentially, that means greater revenues and profits for both airlines,” said Northwest spokesman Doug Killian.

Wall Street cheered the news, pushing Northwest stock up $3.13 to close at $41.25 on Nasdaq. KLM’s U.S. shares were up almost 2% on the New York Stock Exchange, rising 63 cents to close at $35.94.

Minneapolis-based Northwest will buy back KLM’s entire 19.7% stake over the next four years at a cost Northwest execs put between $1.07 billion and $1.17 billion.