United Stays In Bankruptcy Protection, Delta and Northwest Threats Loom
UAL, the parent company of United Airlines, has elected to keep the company in Chapter 11 bankruptcy protection. The company cited a colaboration with is Creditor's Committee, in which the two parties agreed that remaining in bankruptcy would "...provide an additional opportunity to continue collaborating on and reviewing the complex, extensive documents as part of the overall confirmation process" as well as provide "a smoother exit process."
Airline industry observers remain concerned that Delta Airlines and Northwest Airlines may soon also seek bankruptcy protection. Delta has lost billions of dollars since the September 11, 2001 terrorist attacks despite massive cost cutting, including employee concessions. Northwest has fared little beter and faces a looming strike date next week when mechanics may walk off their jobs. The airline says it has contingency plans that will allow it to continue operating even if its mechanics strike, but the last major US aviation work stoppage was also a Northwest action that cost the company millions.
"This isn't a 'strand travelers with tickets' bankruptcy issue," said Joan Bounacos, President of Consumer Help Web. "Even if Delta or Northwest were to seek protection from the bankruptcy courts, there is every indication that they will continue flying their normal schedules and honoring all tickets. We urge consumers to more carefully watch the possible Northwest strike action for next week as that may disrupt air travel more than any financial restructurings the airlines do."
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