Northwest spokesman Bill Mellon said Wednesday that Northwest will file a plan of reorganization with the U.S. Bankruptcy Court in New York by Tuesday.
Becker, the Benchmark analyst, predicted that Northwest's court filing "will be a general plan with a lot of meat left out." Becker said the company will likely wait a while longer before releasing details about the "new Northwest."
Northwest has proved in recent weeks that it's not impossible for two bankrupt carriers to agree to a merger. It has been working to finalize a deal to acquire Mesaba Airlines, a regional carrier. However, that deal is far simpler than a combination with Delta would be, since Northwest is Mesaba's only customer and Mesaba's creditors can be paid in full by Northwest.
Opportunities to consolidate and prevent a repeat of the 2001-2005 experience - when the U.S. airline industry lost a combined $35 billion - are likely to remain paramount in the minds of airline executives. Many big carriers want to shrink the number of seats on the market - especially on domestic routes where they compete with low-fare airlines - so they can keep boosting fares and profitability.
Industry insiders view Northwest CEO Doug Steenland, CFO Neal Cohen and board chairman Gary Wilson as determined to shape their own destiny. They expect Northwest to initiate a merger, rather than wait to be courted.
"One way or another Delta is going to have a dance partner," Jenkins said, but it's still too early to tell whether it will be US Airways, Northwest or someone else.
(c) 2007, Star Tribune
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