The nation's airline crisis deepened Wednesday when Delta Air Lines Inc. and Northwest Airlines Corp. both filed for bankruptcy protection in the face of massive losses, bringing to four the number of big U.S. carriers now operating under the supervision of a bankruptcy judge.
Delta and Northwest, respectively the third- and fourth-largest airlines by passenger traffic, said they would continue flying while they try to regain their financial footing -- a tall order given the surge in jet fuel prices that followed Hurricane Katrina.
The carriers joined No. 2 UAL Corp.'s United Airlines and No. 7 US Airways Group Inc. in seeking Chapter 11 bankruptcy protection from their creditors. Those airlines also have continued their normal flight operations.
Rarely have four of the largest players in a major business -- the quartet carries about five of every 10 passengers boarding a domestic airline -- found themselves in bankruptcy simultaneously. It's a dubious feat that some analysts said marked the onset of an industry shakeout that many have predicted since the airlines were deregulated in 1978.
"It's imperative that the traditional airlines regroup and become stronger," said Hugo Burge, president of Cheapflights.com, a travel website. "The airlines can't go on as they are, and something needs to give."
Delta and Northwest are expected to gradually shrink in size and use bankruptcy to achieve huge cost savings -- especially through employee pay cuts -- to survive. Layoffs also are expected, although neither airline would speculate as to how many.
The bankruptcies also could spawn more airline mergers, reducing the number of competitors. US Airways already plans to leave bankruptcy by merging with America West Holdings Corp., the owner of America West Airlines, later this year.
For now, though, the Delta and Northwest bankruptcies aren't expected to have an effect on travelers.
Under Chapter 11, a company continues operating while it works out a restructuring plan to repay creditors. Delta and Northwest said they would maintain their current flights and frequent-flier plans. United and US Airways have done the same.
"Delta is open for business as usual and will continue normal operations," Delta Chief Executive Gerald Grinstein said in a statement, adding that passengers' travel plans and frequent-flier miles "are secure."
