Northwest to emerge from bankruptcy

NEW YORK (CNNMoney.com) -- A leaner Northwest Airlines is due to emerge from bankruptcy court protections Thursday, at the start of a summer travel season that should see fuller planes and higher fares for most U.S. flyers.

The nation's No. 5 airline in terms of miles flown by passengers, Northwest (Charts) filed for bankrutpcy in September 2005. The filing came the same day as Delta Air Lines (Charts) filed for bankruptcy, and put about half of the nation's air capacity in bankruptcy at that time.

Northwest is set to emerge from bankruptcy Thursday, marking the first time since 2002 that none of the nation's major airlines have been in bankruptcy.

Thursday will mark the first time since 2002 that none of the nation's major airlines have been in bankruptcy.

While low fare carriers such as Southwest (Charts, Fortune 500) have continued to grow in recent years, most of the other old-line airlines such as American Airlines (Charts, Fortune 500) and United Airlines (Charts, Fortune 500) have been trimming capacity. A 6 percent cut in industrywide capacity since Sept. 2005 led to planes being about 80 percent full last year. And planes are expected to be even fuller this summer.

The tighter capacity has helped airlines raise fares. Northwest today is being paid an average of 13.4 cents per mile flown by its passengers, up 14 percent from when it filed for bankruptcy 17 months ago.

But the airline has continued to see higher fuel prices. It's now paying an average of 8 percent more per gallon from the 2005 levels that drove it into bankruptcy.

Since that time it has trimmed nearly 9,000 jobs, or 22 percent of its pre-bankruptcy staff, leaving it with 30,000 employees. It negotiated lower cost contracts with its unions.

It has also fallen behind Continental Airlines (Charts, Fortune 500) in terms of passenger traffic, and its capacity is now less than Southwest Airlines.

Eagan, Minn.,-based Northwest won approval to emerge from bankruptcy earlier this month. Its stock will start trading Thursday under the ticker symbol NWA on the New York Stock Exchange.