Northwest Airlines Corp. exited bankruptcy Thursday, marking the end of a 20-month Chapter 11 reorganization and the first time in almost five years that no major U.S. airline is bankrupt.

Northwest spent a year-and-a-half hacking $2.4 billion off its annual costs, mostly from an aggrieved work force. Like other so-called "legacy" carriers in the ailing airline industry, it was forced to slash costs to compete with newer low-cost carriers and deal with wild spikes in fuel costs.

The company officially relaunched itself as a slimmed-down carrier as Chief Executive Doug Steenland rang the opening bell on the New York Stock Exchange Thursday.

"We believe that we have a viable business plan that will continue to deliver profits in the future," Steenland said in a statement. He said the company plans to focus on customer service and employee relations.

Shares rose as much as 4 percent in early trading on the Big Board, the first time Northwest stock has changed hands on a major public exchange since it was delisted from the Nasdaq in September 2005.

Northwest's emergence from bankruptcy protection appears to signal the end of a five-year period of turbulence for U.S airlines, as it and its rivals have made strides toward ensuring their long-term survival.

But Northwest faces intense competition, high fuel prices and furious employees who resent forfeiting $1.4 billion annually only to see their bosses net enormous payouts from stock and options awards.

Employee rage swelled this month when the company revealed a management compensation plan that awards Steenland stock and options potentially worth more than $20 million.

"Northwest may be emerging from Chapter 11, but it has a long way to go," said Anthony Sabino, a law professor at St. John's University in New York.

"Much of the carrier's unionized work force is tremendously unhappy. And in an intensely competitive and service-oriented industry such as the airlines, the bad blood could cost Northwest dearly, if not doom it altogether," he said.

SURVIVING IN A TROUBLED INDUSTRY

Northwest, which has cut its debt and leasing obligations by $4.2 billion, is not the only airline facing these challenges. Two other major U.S. carriers --- Delta Air Lines (DAL) and UAL Corp's (UAUA) United Airlines -- have also been in Chapter 11 in the last five years.

US Airways Group (LCC) was saved from liquidation only by a merger with America West Airlines, while AMR Corp.'s (AMR) American Airlines restructured without entering bankruptcy.

Without exception these airlines grappled with angry workers, low-fare competition and soaring fuel prices.

The industry mounted a recovery in 2006 thanks to a string of revenue-boosting fare increases, but several failed fare increases in 2007 suggest rising fares are at an end.

Meanwhile, domestic competition is increasingly vigorous thanks to new entrants such as Virgin America Airlines and Skybus Airlines Inc. Consequently, top airlines have warned of excess domestic capacity, which could hurt their ability to raise fares.

In a government filing Tuesday, Northwest predicted softening domestic revenue in 2007 because of industry supply increases and a slowing economy.

"I think they are very sensitive to the tenuous state of domestic demand," said Velocity Group airline consultant Doug Abbey.

He said, however, that Northwest is better positioned than most airlines to support higher fares because of its dominance at its hubs in Detroit and Minneapolis.

"They really dominate those airports with relatively little low-cost competition," Abbey said. "They're in a strong position to maintain higher yields."

Some airlines have reacted by moving capacity to lucrative international routes where they face less competition.

Northwest also has tweaked its domestic operations by acquiring regional partner Mesaba Airlines. It also has launched a regional subsidiary called Compass Airlines.

CONSOLIDATION OUTLOOK

Some, such as US Airways CEO Doug Parker, have said airline mergers are the key to long-term survival as they reduce excess capacity.

Early this year, talk of industry consolidation was rampant. Speculation has died down in recent months, although some still believe consolidation is in the cards -- perhaps even a Northwest-Delta merger.

In January, Delta beat back a hostile takeover bid from US Airways, which in 2005 merged with America West Airlines.

"I'm just presuming, absent any crisis, airlines will do moderately well over the next six months, and then if things go south ... then I think we'd see consolidation rear its ugly head again," Velocity Group's Abbey said.

Northwest's shares rose 60 cents, or 2.45 percent, to $25.10 in morning trade on the NYSE, up from a closing price of $24.50 on Wednesday on a "when issued" basis -- in which shares change hands but trades are not settled until the stock is actually issued.