Exhibit 10.31

MANAGEMENT COMPENSATION AGREEMENT

between

NORTHWEST AIRLINES, INC.

and

BARRY P. SIMON

dated as of

December 3, 2004

MANAGEMENT COMPENSATION AGREEMENT

MANAGEMENT COMPENSATION AGREEMENT made as of the 3^rd day of December, 2004 between Northwest Airlines, Inc., a Minnesota corporation (the “Company”) and Barry P. Simon (the “Executive”).

PREAMBLE

The Company and Executive hereby desire to enter into a Management Compensation Agreement dated as of the date first above written.

1.  Terms of Employment.

1.1                                 Employment.  The Company agrees to employ Executive, and Executive agrees to be employed by the Company, on the terms and conditions set forth herein.

1.2                                 Position and Duties.  During the term of Executive’s employment hereunder, Executive shall serve as Executive Vice President & General Counsel of the Company and shall have such powers and duties as may from time to time be prescribed by the Company.  Executive shall devote substantially all his working time and effort to the business and affairs of the Company and its affiliates.

2.  Compensation and Benefits.

2.1                                 Base Salary.  Executive’s Base Salary as of the Effective Date shall be $425,000.  Executive’s Base Salary in effect from time to time may only be reduced in connection with a base wage reduction for salaried employees of the Company, by an amount not to exceed $85,000.  Executive’s Base Salary shall be payable in accordance with the Company’s payroll policies.

2.2                                 Incentive Compensation Programs.  During the term of Executive’s employment hereunder:

(a)  Executive shall be entitled to receive from the Company, within ten (10) days after the date of this Agreement, a lump-sum cash payment in the amount of $240,000, less all applicable withholding taxes (the “Sign-on Bonus”); provided that, in the event Executive’s employment with the Company terminates on or before the third (3^rd) anniversary of the Effective Date, Executive shall re-pay to the Company within three (3) business days after the effective date of such termination a portion of the Sign-on Bonus in an amount equal to $240,000 multiplied by the Proration Fraction, and the Company shall have the right to offset any amount required to be repaid by Executive pursuant to this Section 2.2(a) against any other amounts payable to the Executive at the time of such termination of employment.

(b)  Executive shall be entitled to participate in the Company’s Key Employee Annual Cash Incentive Plan (the “KEACIP”) or any successor annual bonus plan beginning with the 2005 plan year, the terms and conditions of which shall be established

from time to time by the Compensation Committee.  For the 2005 plan year, Executive’s target incentive percentage shall be 60% of Executive’s Base Salary.

(c)  Executive shall be entitled to participate in the Company’s Long-Term Cash Incentive Plan beginning with the two year performance period commencing January 1, 2005, the terms and conditions of which shall be established from time to time by the Compensation Committee.

(d)  Executive shall be entitled to receive a restricted stock award for 75,000 shares of common stock of Northwest Airlines Corporation, par value $.01 per share (the “Common Stock”), such restricted stock to vest in six equal installments of 12,500 shares each on each six month anniversary of the date of grant until fully vested on the third anniversary of the date of grant so long as Executive remains an active full-time employee of the Company on such dates, the terms and conditions of which award shall be set forth in a written agreement or other documentation which shall be provided to Executive by the Company’s Secretary.

2.3                                 Expenses.  During the term of Executive’s employment hereunder, Executive shall be entitled to receive prompt reimbursements for all reasonable business expenses incurred in performing services hereunder in accordance with the Company’s business expense reimbursement policies in effect from time to time.

2.4                                 Employee Benefit Programs of the Company.  Except as set forth below, Executive shall be entitled to participate while employed hereunder in the Company’s employee benefit programs at levels in effect on the Effective Date.  Exceptions to the preceding sentence are:

(a)          Amounts payable to Executive under the Company’s benefit programs may be reduced to reflect a benefit reduction for salaried employees of the Company, in the same manner that salaried employees are generally affected by such reduction.

(b)         Executive shall not participate in any severance pay plan or annual bonus plan maintained by the Company except to the extent necessary to receive any severance or bonus payments specifically provided for hereunder.

2.5                                 Retirement Plans.  Executive shall be entitled to participate in the Northwest Airlines Supplemental Executive Retirement Plan (the “SERP”) on the terms and conditions set forth in an Ancillary Agreement to be provided to Executive by the Company.

3.  Airline Pass.

In the event Executive remains an active full-time employee of the Company from the Effective Date through the third (3^rd) anniversary thereof, Executive shall be entitled to receive, upon termination of employment, lifetime airline pass privileges for the personal use of Executive and his spouse or registered domestic partner and dependent children so long as spouses, registered domestic partners and dependent children of employees generally are eligible for nonrevenue travel pursuant to the Company’s pass policies (hereinafter, “Eligible Individuals”).  Such airline pass privileges (the “Airline Pass”) shall entitle Executive and

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Eligible Individuals to travel on regularly scheduled domestic and international flights operated by the Company, subject to all charges and fees then applicable to active management employees of the Company and their dependents and pursuant to the Company’s pass policies in effect from time to time, with boarding priority of F1-R.  Executive shall be responsible for any personal income tax liability arising from such pass travel.  Notwithstanding the foregoing, all benefits under this Section 3 shall immediately and permanently cease in the event Executive violates the Company’s pass policies in connection with such travel and/or in the event that Executive is or becomes, at any time thereafter, an employee of any of the top five (5) airlines in the United States (other than the Company) ranked by revenue passenger miles.

4.  Termination of Employment.

4.1                                 Upon Death.  Executive’s employment hereunder shall terminate upon his death.

4.2                                 By the Company.  The Company may terminate Executive’s employment hereunder at any time with or without Cause.

4.3           By the Executive.  Executive may terminate his employment hereunder at any time for any reason.

4.4                                 Notice of Termination.  Any termination of Executive’s employment hereunder (other than by death) shall be communicated by thirty (30) days’ advance written Notice of Termination by the terminating party to the other party to this Agreement; provided that no advance Notice of Termination of Executive for Cause by the Company is required.

5.  Payments in the Event of Termination of Employment.

5.1                                 Payments in the Event of Termination by the Company for Cause or Voluntary Termination by Executive.  If Executive’s employment hereunder is terminated by the Company for Cause, as a result of death or Disability or by Executive other than for Good Reason, the Company shall pay Executive (a) his accrued and unpaid Base Salary through the Date of Termination and (b) any vested or accrued and unpaid payments, rights or benefits Executive may be otherwise entitled to receive pursuant to the terms of any written retirement, pension or other employee benefit or compensation plan maintained by the Company at the time or times provided therein.

5.2                                 Payments in the Event of Any Other Termination of Employment.  If Executive’s employment hereunder is terminated by the Company other than for Cause, or by Executive for Good Reason:

(a)          subject to Section 2.2(a) hereof, the Company shall pay Executive (i) his accrued and unpaid Base Salary through the Date of Termination, (ii) any bonus under the Key Employee Cash Incentive Bonus Program, or any successor annual bonus plan, (the “Incentive Bonus”) for any calendar year ended before the Date of Termination, (iii) a pro rata share (based on days employed during the applicable year) of the Incentive Bonus Executive would otherwise have received with respect to the year in which the Date of Termination occurs, payable at the time the Incentive Bonus would otherwise be

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payable to Executive; provided, however, that 100% of the Incentive Bonus shall be determined solely with reference to the financial performance of the Company for the year (based on the goals previously established with respect thereto) (rather than a portion of the Incentive Bonus determined on the basis of individual performance); provided, further, in the event that Company’s performance exceeds 100% of the financial performance target for the year, that portion of the Incentive Bonus that would have, but for this Section 5.2(a), related to the achievement of the individual performance target shall be 100% and (iv) any vested or accrued and unpaid payments, rights or benefits Executive may be otherwise entitled to receive pursuant to the terms of any written retirement, pension or other employee benefit or compensation plan maintained by the Company at the time or times provided therein.

(b)         subject to Section 2.2(a) hereof, in addition to the compensation and benefits described in Section 5.2(a):

(i)                                     The Company shall pay Executive, no later than thirty (30) days following Executive’s termination of employment, a lump sum cash payment equal to $680,000.

(ii)                                  With regard to group life insurance and group medical and dental insurance, until the earlier of the second anniversary of Executive’s Date of Termination or the date Executive is employed by a new employer, Executive, his dependents, beneficiaries and estate shall be entitled to all benefits under such group life insurance and group medical and dental insurance as if Executive were still employed by the Company hereunder during such period.

(c)          Executive shall not be required to mitigate the amount of any payment provided for in this Section 5.2 by seeking other employment or otherwise, and no such payment shall be offset or reduced as a result of Executive’s obtaining new employment.

(d)         notwithstanding anything else to the contrary in this Agreement, the Company’s obligation regarding the payments and insurance continuation provided for in Sections 5.2(a)(iii) and 5.2(b)(i) and (ii) is expressly conditioned upon the execution, delivery and non-revocation of a general release in the form attached hereto as Attachment A.

5.3                                 Compliance with Tax Regulations.  All payments pursuant to this Section 5 shall be made in compliance with all applicable laws, rules and regulations, including without limitation the provisions of the American Jobs Creation Act of 2004 and all rules and regulations promulgated thereunder.

5.4                                 Board/Committee Resignation.  Executive’s termination of employment for any reason, shall constitute, as of the date of such termination and to the extent applicable, a resignation as an officer of the Company and a resignation from the board of directors (and any committees thereof) of any of the Company’s affiliates and from the board of directors or similar governing body of any corporation, limited liability company or other entity in which the Company or any affiliate holds an equity interest and with respect to which board or similar

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governing body Executive serves as the Company’s or such affiliate’s designee or other representative.

6.  Confidentiality; Non-Compete; Non-Solicitation; Non-disparagement.

While employed by the Company and thereafter, Executive shall not disclose any Confidential Information either directly or indirectly, to anyone (other than appropriate Company employees and advisors), or use such information for his own account, or for the account of any other person or entity, without the prior written consent of the Company or except as required by law.  This confidentiality covenant has no temporal or geographical restriction.  For purposes of this Agreement, “Confidential Information” shall mean all non-public information respecting the Company’s business, including, but not limited to, its services, pricing, scheduling, products, research and development, processes, customer lists, marketing plans and strategies, financing plans and the terms and provisions of this Agreement, but excluding information that is, or becomes, available to the public (unless such availability occurs through an unauthorized act on the part of the Executive).  Upon termination of this Agreement, Executive shall promptly supply to the Company all property and any other tangible product or document that has been produced by, received by or otherwise submitted to Executive during or prior to his term of employment, and shall not retain any copies thereof.

Executive acknowledges that his services are of special, unique and extraordinary value to the Company.  Accordingly, Executive shall not, without the consent of the Company, at any time prior to the first anniversary of the Date of Termination (i) become an employee, consultant, officer, partner or director of any air carrier which competes (other than to an insignificant extent) with the Company (or any of its affiliates) or (ii) whether on Executive’s own behalf or on behalf of or in conjunction with any person, company, business entity or other organization whatsoever, directly or indirectly solicit or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates.  Upon Executive’s termination of employment, Executive may request that the Company consent to Executive’s serving in a position that would otherwise be in violation of the foregoing sentence, and the Company in its sole discretion may elect to provide its written consent to any such service.

While employed by the Company and thereafter, Executive agrees not to make any untruthful or disparaging statements, written or oral, about the Company, its affiliates, their predecessors or successors or any of their past and present officers, directors, stockholders, partners, members, agents and employees or the Company’s business practices, operations or personnel policies and practices to any of the Company’s customers, clients, competitors, suppliers, investors, directors, consultants, employees, former employees, or the press or other media in any country.

Executive agrees that any breach of the terms of this Section 6 would result in irreparable injury and damage for which there would be no adequate remedy at law, and that, in the event of said breach or any threat of breach, the Company shall be entitled to an immediate injunction and restraining order to prevent such breach or threatened breach, without having to prove damages, in addition to any other remedies to which the Company may be entitled at law or in equity. Executive further agrees that the provisions of the covenant not to compete are

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reasonable.  Should a court determine, however, that any provision of the covenant not to compete is unreasonable, either in period of time, geographical area, or otherwise, the parties hereto agree that the covenant should be interpreted and enforced to the maximum extent which such court deems reasonable.  The provisions of this Section 6 shall survive any termination of this Agreement and Executive’s term of employment.  The existence of any claim or cause of action or otherwise, shall not constitute a defense to the enforcement of the covenants and agreements of this Section 6.

7.  Successors and Assigns.

(a)          This Agreement shall bind any successor to the Company, whether by purchase, merger, consolidation or otherwise, in the same manner and to the same extent that the Company would be obligated under this Agreement if no such succession had taken place.

(b)         This Agreement shall not be assignable by Executive.  This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees.

8.  Term.

The term of this Agreement shall commence on the Effective Date and end upon the Executive’s termination of employment.  The rights and obligations of the Company and Executive shall survive the termination of this Agreement to the fullest extent necessary to give effect to the terms hereof.

9.  Notices.

Notices and all other communicati