Delta and Northwest Airlines have both filed for Chapter 11 Bankruptcy protection.
Delta Air Lines Inc., and Northwest Airlines Corp., hobbled by high fuel costs and heavy debt and pension obligations, filed for bankruptcy protection from creditors Wednesday, becoming the third and fourth major carriers to enter Chapter 11 since the 2001 terrorist attacks
Given the fixed costs that these companies face, and the state of the airline industry, this is not at all a surprise. The timing, I think, has more to do with the fact that major changes to the Bankruptcy Code go into effect in one month. By filing now, Delta and Northwest will have their cases governed by the law now in effect.
This will not be the last airline bankruptcy we will be hearing about. I expect Independence Air to file within the next 30 days, if not sooner.
