Bankrupt – but still flying
Are you flying to or in the United States in the near future?
You may be interested to hear that Delta Air Lines and Northwest Airlines have become the latest carriers to file for chapter 11 bankruptcy, joining United Airlines and US Airways.
The airlines have huge financial problems because they’ve got high labour costs and other overheads and cannot compete against the no-frills carriers in the US.
But don’t worry, it doesn’t mean you can’t fly on those airlines. Chapter 11 bankruptcy is a ludicrous law that allows the airlines to continue operating while they sort themselves out. The big difference is that they get protection from their creditors.
So, these airlines can merrily chop prices and squeeze their competitors without worrying about racking up any more debt.
It’s a set of circumstances that would be laughed out of court over here. No wonder British Airways has strongly criticised Chapter 11, claiming it unfairly props up unviable carriers. Not half.
Guest Article by Jeremy Skidmore
Friday, September 30th, 2005
My name is Alan Potts and I'm the Editor of the UK Ferry Tickets web site and Managing Director of BUYability Limited. You can connect with me or keep up to date with new posts on this blog via the following social media sites: 
