War May Ground Northwest and Other Airlines

BY MARTIN J. MOYLAN
St. Paul Pioneer Press 

A war with Iraq will speed the descent of Northwest, Delta, Continental and American airlines into bankruptcy, analysts warn.

Whether or not war drives one or more of these four traditional network carriers into bankruptcy will depend on the severity and length of the conflict — and, most importantly, if terrorists shoot down U.S. carriers’ planes or once again hijack planes and use them as guided missiles.

A Northwest bankruptcy would have huge implications for the Twin Cities, where the Eagan-based airline employs some 18,000 people and is the dominant airline at Minneapolis-St. Paul international Airport. Layoffs and wage cuts could be deeper and come more quickly. Its payments to the Metropolitan Airports Commission could be changed. Its schedule may be dramatically overhauled.

With a war in the Middle East, American likely would enter bankruptcy in three months, forecasts Credit Suisse First Boston analyst James Higgins in a report this week. He gives Continental four months; America West, seven; Delta, 13; Northwest, 20; Alaska, 23.