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Thursday May 12, 01:16
US airlines demand pension reform legislation
(by Helen Snow)

US airlines demand pension reform legislation

About 150 American flight attendants lobbied members of Congress Wednesday at the Capitol, demanding support for pension reform legislation supported by all three of American's unions and by American's management.

 

On Tuesday, the U.S. Bankruptcy Judge Eugene Wedoff released a ruling allowing United to escape from its pensions. The decision is expected to save the airline $645 million annually.

 

Instead, American, Delta, Continental and Northwest demand some version of pending legislation that would allow them to extend a period for payments to eliminate the underfunding of their plans.

 

United management says it will put the four remaining high-cost "legacy carriers" that have already emerged from Chapter 11 bankruptcy — American, Delta, Northwest and Continental — at a disadvantage. The reason is that those four go on offering traditional defined-benefit pension plans that set monthly payments in retirement according to average salary and years on the job. Together, the airlines' traditional pension plans were underfunded by $31 billion as of the end of 2003.

 

However, analysts say that even if pension relief passed quickly, Northwest, Continental and American will be hard-pressed to match the savings United will get by terminating its pension plan. Delta and Northwest are expected to face a bankruptcy filing this year or next.

 

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