Delta shares fall after downgrade
ATLANTA - Shares of Delta Air Lines Inc. fell further below $1 a share Tuesday after several ratings downgrades and an analyst's assertion that the nation's third-largest carrier will shrink if it files for bankruptcy, as expected.
JP Morgan airline analyst Jamie Baker estimated in a research note that Atlanta-based Delta will reduce capacity by 15 percent from current levels, similar to the shrinkage of the two other major airlines in bankruptcy, United and US Airways.
The comments came as Delta prepares to file for bankruptcy. An industry consultant who has been informed of the company's plans told The Associated Press on Monday that the filing was expected to come today, but could be pushed to Thursday depending on when Delta secures roughly $2 billion in debtor-in-possession financing it is seeking.
Delta shares fell 7 cents, or 8.2 percent, to close at 78 cents in trading Tuesday on the New York Stock Exchange.
Northwest may file for bankruptcy
MINNEAPOLIS - Northwest Airlines Corp. said on Tuesday that it chose not to make $42 million in debt payments in recent days, suggesting the carrier is conserving its cash ahead of a potential bankruptcy filing. Bankruptcy worries sliced more than half the value off Northwest shares.
Northwest's board planned to meet this morning to decide whether to file for bankruptcy protection, said Will Holman, a spokesman for the Air Line Pilots Association union, which has a member on the board. Earlier, The New York Times reported in its online edition the carrier may file for bankruptcy protection as soon as today, citing anonymous sources.
Advocates push easing law for
WASHINGTON - Some Democratic lawmakers and consumer advocates are seeking relief for Hurricane Katrina victims from a new, more stringent bankruptcy law that takes effect next month.
Republicans, who dominate both the House and Senate, are frostier to the plan, while the White House has indicated it is considering the idea.
The changes in the U.S. Bankruptcy Code, which make it harder to erase credit card and other debt through bankruptcy, affect an estimated 30,000 to 210,000 people nationwide. Passed by Congress and signed by President Bush in April, the law making the changes already has spurred a rush to the courthouse.
Gas price spike fuels inflation
WASHINGTON - Surging costs for gasoline and other energy products fueled inflation at the wholesale level in August, pressure that is expected to become even more intense once the full impact of Hurricane Katrina is felt.
The Labor Department said its Producer Price Index, which measures inflation before it reaches the consumer, jumped a sharp 0.6 percent in August following an even bigger 1 percent increase in July.
- From wire reports