ALEX CHADWICK, host: This is DAY TO DAY from NPR News.  I'm Alex Chadwick.</s>ALEX CHADWICK, host: The news this week that both Delta and Northwest Airlines declared      bankruptcy was not unexpected.  Bankruptcy almost seems basic to the      airline industry. The list of carriers that are or have been in Chapter      11 includes United, US Airways, ATA, Continental and the late TWA, which      actually filed three times before disappearing for good.  The explainer      team at the online magazine Slate wondered why airlines go bankrupt so      often.  Here with the answer is Slate's Andy Bowers.</s>ANDY BOWERS: Mainly because they can't compete with younger rivals.  Airlines almost      never went bankrupt in the old days, when the federal board controlled      every aspect of the industry, including ticket prices and routes.  But      after deregulation in 1978, so-called legacy carriers began facing lean      and hungry upstart competitors.  The legacy airlines, such as United and      Northwest, pay more to fly their planes than newcomers like JetBlue and      Southwest.  They tend to have more veteran employees who earn higher      salaries and more retirees who get pension benefits.  Their union      contracts, based on years of negotiation, often include more curbs on how      much each pilot or mechanic can be asked to work. Given these higher      costs, the legacy carriers have more difficulty competing on ticket      prices.  A history of credit troubles also makes it more difficult for      legacy carriers to guard against oil price hikes by locking in guaranteed      contracts.</s>ANDY BOWERS: Airlines seem to go bankrupt more often than any other business, but      you'll find a similar pattern in other deregulated industries, like      telecommunications, and in commodity industries.  After all, steel is      steel, so a customers just look for the best price.</s>ANDY BOWERS: How does bankruptcy help an airline?  For one thing, a bankruptcy judge      can impose a new contract and new wage cuts on a union, approve the      transfer of pension obligations to the federal government and agree to      eliminate some debts altogether.  That said, bankruptcy carries very high      legal and other costs, and airlines do what they can to avoid it.</s>ALEX CHADWICK, host: Andy Bowers is a Slate senior editor, and that explainer was      compiled by Daniel Engber.
This week, both Delta and Northwest airlines sought bankruptcy protection. Slate senior editor Andy Bowers explains why it is that airlines seem to go bankrupt so often.