It's difficult to exaggerate how financially fouled up the American airline industry is. It hasn't made money since 2000 -- the year before the 9-11 terrorist attacks.
In 2001-04 it lost $32.1 billion, according to the Air Transport Association, a Washington trade group that represents the major airlines. They are on track to lose another $10 billion this year.
The Chapter 11 filings late Wednesday afternoon of Northwest Airlines, the fourth-largest U.S. airline, and Delta Air Lines, the nation's No. 3 carrier, continue the downward spiral of the nation's oldest and best-known carriers.
High labor costs, including traditional pension programs covering virtually all their employees, have made it difficult to compete with new low-cost airlines that pay less and don't provide those kinds of retirement plans.
The new airlines force the older high-cost carriers to charge less for their tickets, too. That added to last year's soaring fuel prices and helped land Northwest and Delta in bankruptcy court.
"The industry has very little pricing power," said Jack Evans, spokesman for the Air Transport Association. "We know that consumers are very price-sensitive when it comes to airline pricing, and with so many competitors, they gravitate to the lowest fare."
The older airlines, most of which were around before the nation's aviation system was deregulated in 1978, are sometimes called legacy carriers because of the extra costs they still bear from that period: unionized work forces, higher wages, inflexible work rules and those pensions.
Virtually all of them, including Northwest, Delta, American Airlines and United Airlines, have made significant cost-cutting strides since Sept. 11, 2001, winning concessions from workers and cutting food service.
But industry experts say the airlines still have a way to go to bring their costs into line with competitors such as Jet Blue, Southwest and Spirit.
"They're going to have to reduce costs by 10 percent to 15 percent," said airline expert Darryl Jenkins. "They can't afford to do the same things they did six or seven years ago."
Even though more passengers are flying these days, bringing in more revenue for the industry, roughly half the nation's airplane capacity is handled by bankrupt airlines -- something experts say allows too many carriers to stay in the air, adding fuel to the industry's problems.
In addition to Delta and Northwest, airlines in Chapter 11 as of Wednesday were United, US Airways, Aloha Airgroup and ATA Holdings, owner of ATA Airlines. Meanwhile, Hawaiian Airlines just emerged from Chapter 11 this summer and American barely avoided a bankruptcy filing itself.
The U.S. airline industry has turned to Congress for help.
Carriers through their Washington trade group are seeking a one-year suspension of a 4.3-cents-a-gallon fuel tax, saving the industry $600 million.
"I don't think we should ignore any option," Sen. John McCain, R-Ariz., said Wednesday in Washington. "The airlines have been in crises in the past, but I'm not sure I have seen anything quite approaching this."
Sen. Ted Stevens, chairman of the Senate Commerce, Science and Transportation Committee, asked airlines to get their requests to an aide for possible inclusion in disaster-recovery legislation that may "move pretty quickly" next week. "Let us know if there's anything we can do to help you get through this period," the Alaska Republican said.
The airlines' Washington trade group, the Air Transport Association, described its aid request at a hearing of the committee's aviation panel. Jet-fuel prices have increased about 239 percent over four years, and airlines will pay $9.2 billion more for fuel this year than last year, said James May, the group's president.
"Just when you think it can't get any worse, it does," he told the panel.
But it's the industry's historical dependence on the government for help that some experts believe further pushes older airlines into trouble. The industry recently sought federal legislation to give airlines 14 years to catch up with pension payments.
Those experts say the industry's wave of bankruptcies actually does more to stunt competition, of which they say the airline industry needs more.
But the industry's most pressing dilemma -- one that affects both low-fare and legacy carriers -- has been record-high fuel prices in the last year. "There is no airline that has a business model that can afford to sustain jet fuel prices in the range of $90 to $100 a barrel, which is what it's costing us now," said Evans, the group's spokesman.
Some experts blame too much capacity.
"We have a lot of carriers in the game right now," said Terry Trippler, a Minneapolis-based airline expert with cheapseats.com. "Are they all going to survive? I don't know, but every time you talk about the need for capacity reduction, it looks like it will have to be the legacy carriers."
