Travel News Today

A federal judge on Friday approved the reorganization plan for Northwest Airlines, clearing the way for the carrier to exit bankruptcy with USD$2.5 billion cost savings, a company spokesman said.

The ruling by Judge Allan Gropper starts an 11-day «administrative period,» during which Northwest must notify new shareholders and other parties. Once those conditions are met, the airline can leave Chapter 11.

Northwest spokesman Roman Blahoski said Gropper had not officially signed the order approving the bankruptcy exit, but voiced his approval in open court.

The airline has been restructuring in bankruptcy since September 2005. Northwest's emergence would mark the first time in almost five years that a major US airline is not in bankruptcy.

The airline industry in general is in recovery mode after a years-long slump that tipped major carriers as United Airlines, Delta Air Lines and US Airways into bankruptcy.

Shares of Northwest, which will be voided when Northwest exits bankruptcy, plunged more than 30 percent to about 2 cents per share in over-the-counter trade.

(Reuters)