Delta, Northwest File for Bankruptcy

ATLANTA - Delta Air Lines and Northwest Airlines filed for bankruptcy protection within minutes of each other Wednesday evening, an unprecedented one-two blow that leaves half of the traditional U.S. airline industry operating in Chapter 11.

The filings by the nation's third- and fourth-largest carriers had been expected for weeks as jet fuel prices surged past $2 a gallon and relentless fare wars with low-cost rivals gutted revenues.

Delta, which reported $5.2 billion in losses over three years, said it will keep flying its full schedule while it restructures $20.5 billion in debt. Chief Executive Gerald Grinstein called the filing "a necessary step" after the airline exhausted its cash cushion.

Northwest, which has lost more than $3 billion since 2001, faces an additional burden: a mechanics strike that has grounded some repair work for nearly a month. The airline said bankruptcy will not affect its labor strategy or its schedule.

Both airlines assured customers that tickets, frequent-flier miles and reservations are safe. "It is business as usual," a Delta spokeswoman said at Hartsfield-Jackson Atlanta International Airport, the carrier's hub.

The twin filings cap a brutal season for the industry. United Airlines has been in Chapter 11 since 2002, US Airways emerged from its second bankruptcy this week only by merging with America West, and the six big legacy carriers have lost a combined $30 billion since 2001.

Analysts say the restructurings let the carriers slash labor costs, shed aircraft and dump pension obligations — moves that deepen the pain for workers but which the airlines call survival. "Bankruptcy has become the industry's business model," one consultant said.

Delta and Northwest together carry about 200,000 passengers a day and employ more than 110,000 people. Both carriers say international routes — the industry's last profitable frontier — will be protected as they shrink domestically.

The filings came as Hurricane Katrina pushed jet fuel spot prices to records; though they have since retreated, fuel now rivals labor as the airlines' biggest cost.