Airlines’ Filings May Hit Creditors

Travel agents, aircraft owners and other carriers are among those that may lose money in the latest airline bankruptcies.

Plane maker Boeing Co., regional airline Pinnacle Airlines Corp. and online travel agencies Travelocity and Orbitz are all on the hook after Delta Air Lines Inc. and Northwest Airlines Corp. filed for bankruptcy protection Wednesday.

How much, and when, creditors will get paid is far from clear, and it can be a headache for smaller companies that rely on the big airlines for business.

“A company having a huge receivable amount is never a good thing,” said Hugh McDonald, a bankruptcy specialist at law firm Allen & Overy. “There is a price of doing business for each industry, and suffering losses from time to time and trying to recover on them is part of that dynamic.”

Creditors now must begin the drawn-out process of forming a committee and pushing for their case as the airlines put together restructuring plans.

They can also go to the secondary market for bad debt, possibly selling their respective claims to a hedge fund or a bank. But whatever course they take, it is unlikely that they will get the full amount of the debt back.

Delta’s largest creditor is Boeing, which it owes $3.7 billion for aircraft on order. Boeing said Thursday that it would see no near-term economic effect from the bankruptcy filing because it was confident it could reschedule deliveries or sell unwanted planes to other customers.

“We’ve been working with Delta over the course of the last year on rescheduling some of these airplanes,” a Boeing spokesman said.

Northwest’s largest unsecured trade creditor is Dutch partner airline KLM -- now part of Air France -- which is owed $64.1 million. Air France said it would not be affected by the Delta bankruptcy filing, but made no comment about Northwest.

Northwest’s regional partner carriers, Pinnacle Airlines and Mesaba Aviation, a unit of MAIR Holdings Inc., are the airline’s next-largest trade creditors, owed $28 million and $23 million, respectively.

Mesaba, which operates aircraft under the name Big Sky, said Tuesday that Northwest failed to make an $18.7-million payment and that it was looking at “remedies” it did not detail. Pinnacle, which operates planes under the name Northwest Airlink, declined to comment on the debt. Both stocks fell sharply Thursday.

Travel agents will also take a hit.

Northwest owes American Express Co.’s travel services unit $19.2 million in commissions. It owes Sabre Holdings Corp., which owns Internet-based booking firm Travelocity.com, $7.5 million, while Travelocity itself -- listed as a separate creditor -- is owed $1.8 million.

Carlson Wagonlit Travel, partly owned by French hotel group Accor, is owed $4.2 million by Northwest, while online travel company Orbitz, owned by Cendant Corp., is owed $656,000.