UAL Corp.’s United Airlines reached an agreement with a federal pension insurer on hand-over of the carrier’s four underfunded pension plans to the government.
Still, the deal needs approval from a bankruptcy-court judge. The company’s unions and retirees are also widely expected to contest the settlement.
The airlines filed for Chapter 11 bankruptcy protection this fall and now struggles to low costs. The company may save up to $645 million a year for the next five years if it gives up the plans.
US Airways filed for Chapter 11 twice in two years. Its pension plans were twice dumped on the government.
The move is expected to meet the opposition by its more than 120,000 active and retired employees.