It’s almost routine to hear about airlines now coming out of bankruptcy. Northwest Airlines did its emergence from reorganistion the other day slightly differently, with a massive presence at the New York Stock Exchange to demonstrate to investors that the airline was back and open for business and investment. When companies go public and want to mark their initial flotation, their executives will often go to a stock exchange floor for a ceremonial ringing of the bell that marks the start of trading for the day. Northwest chief executive Doug Steenland said that the carrier set a New York Stock Exchange record for the number of people on the bourse’s podium for a first day of trading ceremony. “We had 18 people, including 13 of our finest employees, breaking a record that was set (in 1999) by the World Wrestling Foundation, which only had 17!” Steenland told reporters and Northwest employees. (You’ll see the bell-ringers plus an NYSE official here; none of the people in this picture, Northwest assures us, wrestles for a living.)
Not everyone at Northwest was smiling: its flight attendants, who had given some $195 million in annual payouts and give-backs, approved their concessionary contract by the narrowest of margins just two days before the carrier officially came out of bankruptcy-court protection. In return for that vote, they were awarded a $182 million claim against Northwest that their union, the Association of Flight Attendants, was able sell for 65 cents on the dollar. That is not bad compared to other recent sales of bankruptcy claims against airlines, another practice that is now common. Each of the union’s 6,500 members at Northwest will get about $14,500, 40% in cash and the rest as a contribution to their personal retirement accounts.
This first day of trading also marks the first time since August 2002 that no major US airlines have been in bankruptcy; back five years ago, it was the old US Airways, followed by the new US Airways (out when bought by America West in October 2005), and then by United (out in February 2006) and by Delta. Northwest and Delta filed within 30 minutes of each other on 14 September, 2005, and Delta emerged from reorganisation in the first week of May.