slippahs

Send those fully paid DC-9s away and NW would be in much worse shape.

Jaimito Cartero

Now we get to hear the Maple Bacon people claim they drove NW into BK.

jiburi

I agree there. I think NW's decisions to keep flying the DC9's was a smart move.

While I still prefer flying DC9 over the jungle jets for its first class cabin and its bigger aircrafts, I just wished it's seats were better designed.

Jiburi

plannermann

I am not sure what you mean, can you explain pls?

yogimax

I think the OP is worried that tickets will become worthless if NW files for bankrupcy.

FWAAA

I agree that keeping the paid-for DC-9s throughout the 1990s when fuel averaged $0.55-0.70/gallon made perfect sense, as other airlines were spending billions on DC-9 replacements for their fleets.

But with fuel at over $2/gallon, the economics of old gas hogs changes quite a bit. Lease payments on new, fuel efficient jets aren't quite as expensive, in relative terms.

FWAAA

Skipping the debt payment is a sure sign that NW will file Ch 11 on Wed or Thur. Companies on the courthouse steps typically skip some payments during the final couple of days to conserve cash.

Apparently a $65 million pension contribution is due on Thursday, so the filing will occur before that deadline.

fastair

1) valuable to NW, not to anyone else though--sale price=0
2) Fith freedom, I think (Bill of rights does not pertain beyond hawaii/alaska)
3) No value...anyone can get an agreement for an airplane..airbus would like to give more away.
4) all have value except AMS. AMS has value only in conjunction with KLM...not the #1 place to offer US to europe/africa connections.
7) no value to be able to veto yourself allying with anyone.
8) no hedge this year ( i am 95% certain of that)
9) that has a great write down cost, not a value.

Basicly, the fortress hubs and asian 5th freedom rights as well as an incredibly strong position in the midwest/plains, plus name recognition world wide are the things of value. A strike only detracts from the name brand value.


Edit...forgot the biggest asset to NW right now is large (relativly to all except AA and CO) cash on hand...that is huge.

L Dude 7

Something missing in the []s? While many small communities may lose air service if the big airlines go away, I doubt it will have a very great impact on the economy. While 5 RJs a day may put a city on the aviation 'map', those cities could be better served otherwise.

For example:
25 years ago, one could travel from Temple There was an Amtrak train from Temple to Houston that took 4 hours.

15 years ago, the train was gone, and the best way was to travel 30 minutes to Killeen, fly to Dallas, and then connect to Houston. In theory 'travel' time had been reduced to just under three hours. However, tack on 30 minutes to get to the airport on both ends and its a wash. Add in the additional padding needed (worry about traffic, missed connections, etc.) and it looks worse than before.

Today Continental offers nonstop flights to the new Killeen airport. However, its now about a 50 minute trip from Temple to the airport.

And good 'ol bus service is still prodding along at about 5 hours from Temple to Houston. And you could also drive it in 4 hours.

Now to the original point - a lot of effort has been spent by the legacies to support air traffic to small cities. However, many of these small communities would be better served by alternate travel means. Many of them have even shown this. Even though Waco, Texas has its own airport, many fliers drive the two hours to Dallas or Austin, rather than flying out of Waco. Should the legacies evaporate, then Waco is not likely to see service resume. However, Waco itself would still be able to fulfill its travel needs.

Would NW leave, you can bet that the Asia service would be replaced in a heartbeat. And MSP-ORD, DTW-LGA, etc. would not be lacking. MSP-YQR, however, would probably not be picked up. However, there would still be connecting options like MSP-YYZ-YQR. The smaller cities would be the ones that would hurt - which would mean that us expense-account types would have doing what the locals do and drive to the big airports.

The legacies provide a service to the small communities by grouping their flights together at hubs, allowing connections in one stop between just about anywhere. However, the discounters are adept at picking off the most lucrative of these. Even if NW and WN had the same cost struture, NW would be at a disadvantage, since they would need two flights to travel PHL-MSP-OAK, while Southwest would do it in one. If Northwest offered a nonstop, they would hurt some of the podunk-MSP-PHL and podunk-MSP-OAK traffic.

tcook052

Amen! The game reminds me of being in jail in monopoly, of course, with much, much more at stake. The interesting part is when, or if, UA/US/DL/NW will emerge from protection and whether they're any leaner & meaner & smarter than when they went in.

FWAAA

We need to keep in mind that there are millions of Americans who don't understand what happens when an airline files for protection under Ch 11 and they are legitimately scared that their tix may become worthless.

To add to that mass of confusion, in many other parts of the world, there is no such thing as reorganization under Ch 11 and the term bankruptcy roughly translates as a Ch 7 liquidation. The concept of ditching many debts in bankruptcy, trimming future bills, attracting new debt funding and continuing to fly is foreign to them.

To all of you people who don't live and breathe this stuff: Relax. Your tickets are fine.

At least for now. If the airline liquidates, then you'll have problems.

bk42

The cash on hand has changed quite a bit, and is down to about only $1 Billion.

Of value (in order of importance):
1. Fifth freedom Japan rights
2. Hubs in Detroit and Minneapolis, Memphis of little value (too small of a city.) Quite complicated, but market is strongly controlled by NW and thus has a huge customer base.
3. The planes themselves
4. Early delivery slots for 787 (not the planes themselves, they're selling like hotcakes, Airbus slots fairly easy to obtain)
5. veto rights in Continental

The KLM immunized alliance comes only of interest if a merger takes place, which is highly unlikely. I'm also not familiar with the veto rights in Continental, whether they're transferable or not, how it works exactly, etc. etc.

The DC-9s were still quite useful a couple years ago even, but now with the skyrocketing gas prices, they just aren't efficient enough anymore.

sllevin

It's actually 25% here in the US (unlike most other countries, where you are correct in the 49% figure).

That said, even 25% would be a serious chunk of cash.

Obviously all the current payments are behind withheld because if they decide to file tomorrow, that would essentially be throwing money away.

I have to believe that any vote tomorrow is a formality.

Steve

USFlyerUS

We have nothing to worry about. I'm a long time US Chairman's Preferred member (and a NW Platinum this year), and Chapter 11 really doesn't impact customers directly. HOWEVER - Expect further on board cuts, aircraft returns, cut routes, reduced F meals, etc. US flyers are used to this. UA has done a better job of not cutting on board service, but, then again, some would argue they should be cutting more. Don't fret. Don't panic. Just book the airline you want to fly with a credit card and you'll be fine.

Infinity

Your point above is so true.

I'm actually tired of explaining to my colleagues at work that their miles and future tix are safe...