What Will Delta, Northwest Bankruptcies Mean for Passengers?

ByABC News
September 14, 2005, 6:32 PM

Sept. 14, 2005 — -- Delta Air Lines and Northwest Airlines -- the third- and fourth-largest air carriers in the country -- were brought to their knees today and filed for Chapter 11 bankruptcy.

The companies were crippled by stiff competition from discount carriers and the soaring price of jet fuel after Hurricane Katrina debilitated key oil refineries.

"Katrina forced the issue," said Terry Trippler, an airline analyst at Cheapseats.com. "There's no issue about that."

"The airline industry has changed permanently," Doug Steenland, Northwest's chief executive officer said in a written statement. "Northwest must significantly lower its costs to compete with other carriers."

With the announcements today from Delta and Northwest, more than half the seats on the nation's airlines are now operating in bankruptcy.

If the cost of jet fuel stays high -- and low-cost carriers continue to grow -- there could be more bankruptcies.

"You will see American Airlines and Continental filing Chapter 11 as well," said airline consultant Darryl Jenkins.

Some say a shakeout of the industry is inevitable. If that happens, passengers could see flight cuts, entire routes eliminated and fewer seats for sale at higher prices.

The move will surely mean more cuts in wages, pensions and benefits for employees of these airlines.

Both Delta and Northwest tried to reassure the flying public today that for them it would be business as usual. Planes will keep flying, tickets will be honored and frequent flier programs will continue.

At a Delta terminal in New York today, passengers were anxious.

"I hope when an airline is in bankruptcy, it won't affect security," one traveler told ABC News.

Bankruptcy hasn't hurt the safety records of U.S. Airways and United, which have also declared bankruptcy. The Federal Aviation Administration increases safety inspections of bankrupt airlines.

But even if passengers don't see much difference now, major changes may soon be coming.

ABC News' Betsy Stark filed this report for "World News Tonight."