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Wednesday May 11, 08:14
UAL heads to top pension default
(by Dr.Goldfinger)

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UAL heads to top pension default United Airlines parent UAL Corp. is heading to the largest in the US history pension default on the decision of a bankruptcy judge to approve a proposal from the company to transfer four underfunded employee pension plans to the federal government.

The plans are having a $9.8-billion shortfall and cover about 120,000 United workers and retirees. The workers and retirees will be transferred to the federal Pension Benefit Guaranty Corp., or PBGC.

A Chicago court Bankruptcy Court Judge Eugene Wedoff approved the joint settlement by the PBGC and UAL. United’s unions are getting ready to oppose the decision and seeking ways to get back benefits. UAL was searching for Chapter 11 protection several times and is expected to file for bankruptcy protection as soon as this year.

The judge’s decision will have certain impact on the whole industry that struggles higher fuel costs, overcapacity and fierce competition. UAL’s rivals will have greater opportunity to compete with the carrier after the decision.

"We clearly recognize that the court’s decision is difficult for our retirees and our employees, who have been doing extraordinary work throughout this restructuring process," said UAL in its statement.
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Read the related news and articles:
20 May 2005 09:17 AM US Airways to merge with America West creating 6th-largest carrier
19 May 2005 10:56 AM US Airways finalizes merger with America West
17 May 2005 05:41 PM UAL reached cost-saving agreement
16 May 2005 12:41 PM US Airways and America West need funding from investors to get merged
16 May 2005 06:06 AM United Airlines can’t get rid of troubles with pensions
 


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