Delta and Northwest Have filed Chap 11 Bankruptcy

Stemming from loses from 2001 and the increased fuel prices largely impart due to Hurricane Katrina both Northwest and Delta Airlines have declared Chapter 11 Bankruptcy protection from their creditors. Chapter 11 protection will allow both airlines to reorganize their debt, renegotiate capital leases (aircraft, spare parts, etc), terminate employee pension plans, and void union contracts if need be.

Delta who is in much worse shape then Northwest had put up their last remaining free assets. Northwest whose Chap 11 filing was due mainly because of high labor costs it has failed to reduce outside of Chap 11.

While both airlines will continue to operate as normal to the customer the real victims will be the employees who most certainly will lose their pensions and their jobs if reductions are taken at either airline.

Interesting to note Delta declared they are 20 billion in debt with 21 billion in asests, of that only 1 billion is free and clear of liens. Northwest has 1.5 billion on hand with expected payments for fuel and pension plans to be 5 billion this year.


(related link http://nycaviation.com/forum/viewtopic.php?t=783 )

So out of the big six, this leaves AA and CO as the only 2 that aren't in hot water (and WN if you consider that a big six).

I have a feeling that while bankrupt, both US and UA will be in better shape than NW and DL in 6 months. HP <-> US, and UA will be on track to emerge from bankruptcy (though that date has been pushed back for the last 18 months.)

Our government needs to do something...