Despite far-reaching money saving initiatives, Northwest was forced to file for Chapter 11 bankruptcy protection for the first time in its 79-year history. The filing took place in the U.S. Bankruptcy Court for the Southern District of New York on September 14, 2005. With Northwest's filing, four of the six largest U.S. carriers were operating under bankruptcy protection. Northwest joined Delta Air Lines (which filed just minutes before), United Airlines, and US Airways in bankruptcy. All four carriers subsequently emerged from bankruptcy protection. Northwest common stock shares dropped more than 50% for the second time in three days following the news, largely because stock is generally canceled as part of the bankruptcy process. In the following weeks, Northwest Airlink carriers Mesaba Airlines and Pinnacle Airlines both announced that Northwest Airlines had missed payments to them for their Airlink flying. Northwest also announced plans to shrink its Airlink fleet by over 45 aircraft. Mesaba Aviation filed for Chapter 11 Bankruptcy on October 13, 2005.
Northwest announced on May 18, 2007, that shares of the company would begin to trade on the NYSE under the ticker NWA. Initial trading on a "when-issued" basis began on May 21, 2007, and regular trading began on May 31, 2007. Also on May 18, 2007, Northwest Airlines was cleared by a federal bankruptcy judge to emerge from Chapter 11 Bankruptcy protection on May 31, 2007, ending Northwest's 20 months of difficulty trying to slash costs.
On July 16, 2007, Northwest Airlines applied to the United States Department of Transportation for nonstop service between its WorldGateway hub at Detroit to Shanghai (beginning in 2007 on Boeing 747-400s) and to Beijing (beginning in 2010 on Boeing 787 Dreamliners). The airline faced off against Delta Air Lines (who proposed Atlanta to Shanghai and Beijing), American Airlines (Chicago/O'Hare—Beijing), Continental Airlines (Newark—Shanghai), US Airways (Philadelphia—Beijing), United Airlines (Los Angeles—Shanghai and San Francisco—Guangzhou), and MAXjet (Seattle—Shanghai) in the route competition.[citation needed]
On August 12, 2007, Northwest Airlines became a passive investor in the purchase of Midwest Airlines by TPG Capital. The airline stated that while it was an investor, it would not participate in any management or control of Midwest Airlines.[23] However, on August 14, 2007, AirTran Airways raised their offer for Midwest to $16.25 a share, 25 cents more than the TPG offer.[24] But soon after on August 17, 2007, TPG Capital raised their offer to $17.00 a share which sealed the deal. Northwest Airlines became a minority owner of Midwest Airlines in the fourth quarter of 2007.
On September 25, 2007, Northwest Airlines received DOT approval to begin service to Shanghai from its Detroit hub beginning March 25, 2009. American, Continental, Delta, and US Airways also received new or additional China route authority to Shanghai or Beijing, and United received authority to serve Guangzhou.
