Will airlines go bankrupt?

Will airlines follow US automakers into bankruptcy protection?

Auto companies and airlines are both getting hammered by the recession, but while two of the nation's major carmakers went into bankruptcy court protection, the leading U.S. carriers are flying above the carnage -- for now.

Make no mistake, the airlines are in big trouble, with air traffic in a free fall this year. Many business travelers -- the most profitable customers for an airline -- have been grounded. Others have moved from the first-class cabin back to coach.

Leisure travelers have been worried about losing their jobs. To lure nervous vacationers, carriers have slashed summer fares, and experts report some of the cheapest travel prices in years.

All the major U.S. carriers except Southwest lost money last year. The leader of an international airline trade group said last week that worldwide the industry will lose $9 billion this year -- nearly double the loss the organization predicted in March.

Still, no major U.S. airline is in bankruptcy court protection. Compare that with the auto industry, where General Motors Corp. filed for Chapter 11 protection last month, following in the tire tracks of Chrysler, which sought court protection from creditors in April and was taken over by Italy's Fiat Group SpA.

So.. here is the answer why aren't airlines in bankruptcy court protection?
--> because they went through bankruptcy in the last downturn, and they're still benefiting from that.

Delta Air Lines Inc., United parent UAL Corp. and US Airways Group Inc. used the bankruptcy-court process to reduce debt and cut labor costs earlier in this decade. They emerged leaner, with fewer liabilities -- some dumped pension obligations on the federal government -- and with less debt.