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Essay / Research Paper Abstract
This 4 page paper discusses the recent bankruptcy filings of Delta Airlines, Northwest Airlines and Delphi Corporation. The reasons each company cited as the causes for the action are reported. The writer speculates on whether or not the companies could have done anything differently. Bibliography lists 4 sources.
Page Count:
4 pages (~225 words per page)
File: MM12_PGbnrpt.rtf
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Unformatted sample text from the term paper:
the fourth largest (Isidore, Delta, Northwest, 2005). They were preceded into bankruptcy court by United Airlines in 2002 and US Airways, which has been in bankruptcy court twice since September
11, 2001 (Isidore, Delta Air, 2005). It is no secret that the airline industry has been in trouble for years. The Air Transport Association reported that between 2001
and 2004, the airline industry saw losses of $32.3 billion (Isidore, Delta, Northwest, 2005). When all the figures are in, another $9 billion to $10 billion in losses is expected
for 2005 (Isidore, Delta, Northwest, 2005). Both companies cited rising fuel costs, which have increased by 20 percent since June, as one of the reasons (Isidore, Delta Air, 2005). Hurricane
Katrina knocked out refining capacity in that region, which led to soaring jet fuel costs (Horwich, 2005). Northwest cited having the highest labor costs in the industry as another
reason, along with extremely large pension payments that will come due in the near future (Horwich, 2005). Competition from low-cost airlines, like Southwest, has driven ticket prices down, causing more
financial problems for the large carriers (Horwich, 2005). One of Deltas problems is that it does not have as much international traffic as other major carriers (Isidore, Delta Air, 2005).
This would help revenue since the low-cost carriers do not fly internationally. Neither of these companies took aggressive cost-cutting actions soon enough. One author noted that Delta sold Atlantic
Southeast Airlines, one of its feeder airlines, for $425 million the week before the company filed Chapter 11 (Isidore, Delta Air, 2005). The company also reduced the number of flights
at its hub in Cincinnati by 26 percent (Isidore, Delta Air, 2005). But it was too little too late. As this author said: "But these and other cost-cutting moves made
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