Northwest Airlines Given Green Light to Emerge from Bankruptcy

By: Associated Press
By: Associated Press

Northwest Airlines received approval Thursday to emerge from bankruptcy, freeing it to move out of court protection from its creditors and into an industry besieged by higher fuel costs and crowded with competitors.

Eagan, Minn.-based Northwest Airlines Corp., the nation's fifth-largest airline, has spent more than 20 months cutting costs in its reorganization effort and said it expects to come out of bankruptcy in June.

"They're going to be in a very strong position," airline industry consultant Mike Boyd said. "They have a strong vision of what they want to do. If you're going to bet on an airline, I'd bet on them."

Boyd notes that Northwest will be able to build its growth around a global hub in Detroit for access to China as well as a hub in Tokyo.

More than 97 percent of creditors eligible to vote on the company's reorganization plan have approved it. U.S. Bankruptcy Judge Allan Gropper approved the plan Friday after a two-day hearing in New York.

Airlines face cost challenges such as higher jet fuel prices and less flexibility in setting ticket prices. At the same time, the industry's success in lowering wages has created a new problem: attracting and retaining workers, from flight attendants to pilots who are willing to work harder for less money.


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