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Northwest Airlines Corp.

Airline Bankruptcies Loom as Wholesale Prices Rise, Hurricane Relief Efforts Gain Momentum

Strategic Insights

— 1 min read

As Hurricane Katrina recovery efforts gain momentum in Hampton Roads, two major airlines, Northwest Airlines and Delta Air Lines, are preparing to file for bankruptcy protection, according to sources close to the companies. In other economic news, US wholesale prices rose less than forecast in August, and the trade deficit unexpectedly shrank in July. Meanwhile, local businesses are responding to the national call for help after Hurricane Katrina.

Key Takeaways:

  • Northwest Airlines and Delta Air Lines are preparing to file for bankruptcy protection, with the fundamental work of preparing each case complete, according to sources close to the companies.
  • The producer price index rose 0.6 percent in August, following a 1 percent jump in July.
  • The trade deficit unexpectedly shrank 2.6 percent in July to $57.9 billion.
  • The Trump World's Fair Casino property in Atlantic City, N.J. was auctioned off, with The Donald and Bruce Toll bidding $25 million and $25.15 million, respectively.
  • Real estate developer Bruce Toll outbid The Donald, but Trump stated that he was "really happy" with the price and prioritized getting a good deal for his stockholders.
  • Relocation executive Mary Beth Ivins said she saw the storm as "a series of miracles" in how it affected her family and business.
  • Ace Glass & Bottling Company's founder and CEO Rob Cirlan described the Katrina relief efforts as "something that resonates with us."

Statistics:

  • 0.6 percent increase in the producer price index in August.
  • 1 percent jump in the producer price index in July.
  • 2.6 percent shrinkage in the trade deficit in July.
  • $57.9 billion US trade deficit in July.
  • $25 million bid by The Donald for the Trump World's Fair Casino property.

Sources:

  • "People close to Northwest Airlines and Delta Air Lines" (unnamed source)
  • "The Labor Department" (Department of Labor)
  • "The Commerce Department" (US Department of Commerce)
  • "The Donald" (real estate developer)
  • "Bruce Toll" (housing developer)
  • "Mary Beth Ivins" (relocation executive)
  • "Rob Cirlan" (Ace Glass & Bottling Company's founder and CEO)

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