US airlines head for bankruptcy

AFTER years of losses and soaring fuel costs driven even higher by Hurricane Katrina, two of America’s biggest airline carriers, Delta and Northwest, looked to be headed to bankruptcy court last night.

Shares of Delta Air Lines Inc fell yesterday amid expectations it could file for bankruptcy after the market closed. Northwest Airlines Corp shares, meanwhile, rose as the carrier’s board was set to meet to decide on a Chapter 11 filing.

An industry consultant said Delta planned a bankruptcy filing late last night. The board of directors would have to approve such an action.

Northwest’s board was scheduled to meet last night to decide on a Chapter 11 filing, said a spokesman for the Air Line Pilots Association union, which has a member on the board.

If both airlines filed for bankruptcy, four of the nation’s biggest carriers would be in Chapter 11.

United Airlines is in Chapter 11 and US Airways Group Inc is there for the second time in three years.

Delta shares fell 10.3%, to 70 cents in early trading Wednesday on the New York Stock Exchange. Northwest shares rose 16 cents to $1.73 on the Nasdaq Stock Market.

On Tuesday, Northwest said it had decided not to make $42 million (€38m) in required debt payments. It also faces a Thursday deadline to make a $65m (€53m) pension contribution, but “has made no decision” on a bankruptcy filing, a spokesman said.

Hurricane Katrina hit Delta hard because of its presence in the South.