Air Transport

Flight International online news 09:00GMT: Both Delta Air Lines and Northwest Airlines bowed to the seemingly inevitable and filed for Chapter 11 bankruptcy protection on Wednesday. 

 
Storm clouds over Northwest Airlines 

Both major carriers applied for court protection from creditors at the southern district of New York.

In a statement, Northwest’s CEO Doug Steenland says: “The airline industry has changed permanently. Northwest must significantly lower its costs to compete with other carriers. Many of these are legacy carriers that have already used the bankruptcy process to achieve changes in their cost structures or newer, low- cost carriers which have much lower labour and operating costs than legacy carriers.”

He adds: “We had developed a plan to restructure Northwest outside of Chapter 11 and have been implementing that plan. Unfortunately, in addition to an uncompetitive cost structure, our efforts have been overtaken by skyrocketing fuel costs.

"We can no longer continue to incur sizable losses and reductions in liquidity as we attempt to complete implementation of the plan. By filing for Chapter 11 now, we ensure that we have the means to complete the transformation of Northwest quickly and effectively.”

Delta’s statement simply says the court filing is being made “to address its financial challenges and support its ongoing efforts to become a simpler, more efficient and cost-effective airline”.

The airline’s board, which met on Wednesday, voted unanimously to take the protection granted under current US law.

On the same day, US Airways’ creditors approved the carrier’s plan to emerge from  Chapter 11 and complete merger plans with America West Airlines.

DARREN SHANNON/WASHINGTON DC