Northwest Airline's shares dived nearly 12% on Monday on investors' fears the struggling US carrier may be unable to avoid filing for bankruptcy protection.
The Minnesota-based carrier needs to make big cost savings
The share price drop came as Northwest withdrew a $50 price rise on fares for business travellers after rivals failed to match it.
The climbdown was a sign that Northwest lacks the clout to have pricing power.
But investors were also said to be worried by slow restructuring talks, and by the chairman's share sales.
The airline's chairman, Gary Wilson, has sold 59% of his personal shareholding in Northwest since mid-May.
The share sales have been publicly documented in compulsory filings with the US Securities and Exchange Commission.
The airline's chief executive Doug Steenland last week said its pension costs were unmanageably high and could force it to file for bankruptcy protection, Reuters reported.
Northwest is battling to find $950m in savings and is in talks with its unions over restructuring.
It cut nearly 5,000 jobs in 2003, and last year pilots agreed to a 15% pay cut.
It is not the only US airline that is struggling commercially. US Airways, for instance, has sought bankruptcy protection twice in two years.
The overcrowded US airline industry was suffering from poor profitability and pressure from budget airlines before the 11 September attacks pushed it into crisis and triggered a wave of restructuring.
Since then, oil price rises have added to pressure on the airlines' profits.
A Wall Street Journal report on the state of Northwest's finances is said to have helped trigger the sell-off. "There's no new news," said Calyon Securities airline analyst Ray Neidl, putting Northwest's chances of avoiding bankruptcy protection at "better than 50/50".
Northwest's shares finished 11.9% lower on Monday at $5.58.