The Boston Herald has filed Chapter 11 and its assets likely will be sold to Gatehouse Media for $5 million. Gatehouse went bankrupt in late 2013, but today it owns 130 daily newspapers and 640 community papers. The Herald will be among its largest holdings. This Chapter 11 filing is another in long line newspaper problems that have signaled the demise of the industry.

The paper said about the company’s decision:

Boston Herald Inc. (BHI), hindered like many other newspapers with significant pension and retirement liabilities as well as declining revenue with the onset of digital media and a growing variety of news originators and aggregators, had some 900 employees at its peak in 2000. Today it has 240; more than 120 of them work in the newsroom.

The pension liabilities probably would not be a problem if the company itself were healthy.

Newspapers have lost well over half their revenue since the start of the Great Recession. Results from publicly traded newspaper chains show that revenue continues to drop at 8% to 9% a year. No one believes newspapers can survive these declines without more cost cuts. The few exceptions include The New York Times, which can charge hundreds of dollars a year for its 2.5 million plus digital subscriptions. Most papers struggle to get even a small number of paid digital subscribers, even at low prices. That means most papers have to rely on the revenue they get from print, which has collapsed, and digital advertising, which is growing only slowly.

The newspaper industry looks like the airline industry did decades ago. Airlines were burdened by pensions and unions. More importantly, they were burdened by heavy competition, seat over capacity and high payments for their airplanes. Chapter 11 filings became a normal part of the industry. These bankruptcies helped the airlines shed pension obligations and many airplane loans, and it curtailed the power of unions. That allowed the industry to regain its health.

Newspapers will not be as lucky as the airline industry. Their web operations need to compete with local television websites. They also need to compete with the ad dominance of Google and Facebook. Unlike the airline industry, reorganizing the newspaper industry only buys it a few more years.

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