With skyrocketing fuel costs, sky high labor costs, pension problems, and more, the airline industry is facing some very tough times. Many airlines are rumored to be in financial straights. In fact, Delta and Northwest both filed for bankruptcy today. Read the story from the San Francisco Chronicle. But this Chapter 11 filing may not immediately affect flights. As always, check with your airline before boarding any plane to see if it’s on time — and stilll on the schedule.
Delta had nearly $10 billion in losses since January of 2001. Northwest has had the added problem of having its mechanics on strike since August 20, but has missed payments of $42 million and $65 million in pension contributions. Before the strike, it had been seeking paycuts of about 25%.
It gets worse. During the second quarter ending June 30, Delta rolled up a $388 million loss, while Northwest experienced a $225 million loss.
UAL Corp.’s United Airlines filed for bankruptcy but is now emerging. So did US Airways, which is now undergoing a reorg. AMR/American Airlines almost declared bankruptcy but emerged profitably without it several years ago. Continental is solvent for now, too.