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Northwest shares plunge as bankruptcy looms


Shares of Northwest Airlines (Nasdaq:NWAC - news) plunged 58 percent on Tuesday following a press report that the No. 4 U.S. carrier could file for Chapter 11 bankruptcy protection as early as Wednesday.

The New York Times, citing anonymous sources, said both Northwest and No. 3 carrier Delta Air Lines (NYSEAL - news) were very close to filing.

"The shares are down obviously on the New York Times article. That's the only news that came out before the stock before the stock began to fall," said Helane Becker, an analyst at Benchmark Cos.

"I think that they will file before October 17 for sure. With oil prices where they are and big pension contributions due, and without higher airfares, Northwest had no choice," Becker said.

Shares of Northwest were down 57.7 percent, or $1.91, to $1.40 in afternoon trade on Nasdaq.

The Times report said both airlines were putting the finishing touches on their bankruptcy cases and that both are prepared to file in the United States Bankruptcy Court in New York.

A Northwest spokesman said the company has made no decision regarding a Chapter 11 filing. Delta said on Monday that it would not comment on bankruptcy speculation.

The airline industry has been battered by soaring fuel costs and low-fare competition. UAL Corp's (OTC BB:UALAQ.OB - news) United Airlines and US Airways (OTC BB:UAIRQ.OB - news) both are nearing the end of their own periods operating under Chapter 11.

...continued at http://news.yahoo.com/s/nm/200...u=X3oDMTA4MHNjNWZuBHNlYwMxNjk0