Nearly four years after American taxpayers gave $15 billion to the airline industry, two more carriers are preparing to declare bankruptcy.
Northwest Airlines and Delta Air Lines are both preparing to seek bankruptcy protection as soon as Wednesday, people close to both companies said today.Northwest and Delta are each finishing the details of their bankruptcy cases, including the financing that they will require to operate under bankruptcy protection, these people said. That could cause delays, but the fundamental work of preparing each bankruptcy case is complete, they said. ...
If Northwest and Delta both file, that would mean four of the industry's seven biggest airlines were operating under bankruptcy protection, reflecting the deep competitive issues that have battered the airlines since the year 2000.
Backruptcy and restructuring are probably the best things the airlines can do, and they probably should have done them years ago. Maybe the $15 billion bailout was beneficial because it delayed this meltdown for a few years, but then again maybe it would have been better to get the worst over with as soon as possible. Our major airlines were burdened with unsupportably high salary contracts with their unions and obsolete fleet structures, and failure was inevitable, particularly after 9/11.
