Airlines Grapple With Chapter 11 Status

Airline experts don't expect Atlanta-based Delta Air Lines Inc. and Eagan, Minn.-based Northwest Airlines Corp. to take as long to reorganize as United did.


While there are differences among the Delta, Northwest and United bankruptcy cases, the greatest similarity is the carriers' heavy debt obligations.

High fuel costs and competition from discount rivals have helped contribute to $58 billion in net losses since January 2001 at the six legacy carriers, those with a large presence in multiple regions prior to deregulation in 1978. The total includes enormous charges United's parent took in the fourth quarter of last year.

"The smartest or luckiest thing UAL did was stay in bankruptcy for three years," said Rochelle, the New York bankruptcy lawyer. "Had they rushed to confirm a plan, they would likely have needed a return visit to Chapter 11."

Several other carriers also filed for bankruptcy in recent years during the industry downturn, including Hawaiian Airlines, ATA Airlines and US Airways Group Inc. Hawaiian emerged from Chapter 11 in June 2005 and US Airways exited bankruptcy last fall after receiving approval to merge with America West Holdings Corp.

On Monday, a judge cleared the way for ATA Airlines and its parent company ATA Holdings Corp. to emerge from bankruptcy. The Indianapolis-based carrier is expected on Tuesday to announce the date it will emerge after paperwork is filed.

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AP Business Writer Dave Carpenter in Chicago and AP writer Chris Williams in Minneapolis contributed to this report.

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On the Net:

Delta Air Lines Inc.: http://www.delta.com

Northwest Airlines Corp.: http://www.northwest.com

United Airlines: http://www.united.com


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