Jan 10, 2006 1:13 pm US/Central
NWA Gets 6 More Months For Bankruptcy Plan
NEW YORK (AP) ―
A New York bankruptcy court judge on Tuesday allowed management of Northwest Airlines Corp. six more months to develop a reorganization plan.
The carrier, which faced a Jan 12. deadline for such a plan, in court papers called its bankruptcy "among the largest and most complex cases ever filed," at a time when "the entire airline industry is in financial turmoil."
Judge Allan L. Gropper said he has "been impressed" by Northwest's constructive approach to its restructuring.
Attorneys for Northwest, the fourth-largest airline, said it may not actually have a plan until the end of 2006 and reserved the right to seek further extensions. They also said the carrier may not seek debtor-in-possession financing until it has more clarity on its cost structure.
Northwest may not generate "significant" money until 2009 or 2010, according to an earlier filing by Seabury Group LLC, which the carrier hired to advise it through bankruptcy.
The carrier also said in a recent court filling that the shape of its business would depend on the cost savings it can get from workers, aircraft financiers, and pension and retiree obligations.
Without knowing how the issues will be resolved, Northwest said it can't decide which markets to serve, which airplanes to fly, or which leases to reject. Under Chapter 11 protection, the airline may renegotiate or reject leases for aircraft.
On Jan. 17, a trial is set to begin on Northwest's requests to reject union contracts and impose the company's own terms on its pilots, flight attendants, and ground workers.
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Northwest Airlines was founded in 1926, when it began carrying air mail from the Twin Cities to Chicago on a pair of rented, open-cockpit biplanes. The company began transporting ticketed passengers almost a year later.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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