ATLANTA - Delta Air Lines Inc. filed a formal request with bankruptcy court late Friday to terminate its pilots' pension plan, as President Bush prepared to sign a bill aimed in part at helping the struggling carrier save its other employees' pensions.
If the court in New York approves Delta's request to cancel its pilots' pensions effective Sept. 2, the government's pension insurer would take over the plan and pay pilots a reduced benefit based on when they retire and other factors. A hearing on the request is set for Sept. 1.
The 6,000 pilots, as part of a $280 million concessions agreement with the company first reached in April, have agreed not to oppose the pension termination request, though other groups may oppose it. Atlanta-based Delta notified the Pension Benefit Guaranty Corp. in June of its intent to seek termination of the plan.
"Unless the pilot plan is terminated, Delta will very soon face an operational and financial crisis that will prevent it from emerging from Chapter 11," the airline said in its filing.
"Delta likely could not survive an operational disruption of this magnitude," the airline said.
Delta said that if Bush signs the relief legislation it believes it can emerge from Chapter 11 without terminating its non-pilot pension plan, because that plan does not have a lump sum feature.
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If the court in New York approves Delta's request to cancel its pilots' pensions effective Sept. 2, the government's pension insurer would take over the plan and pay pilots a reduced benefit based on when they retire and other factors. A hearing on the request is set for Sept. 1.
The 6,000 pilots, as part of a $280 million concessions agreement with the company first reached in April, have agreed not to oppose the pension termination request, though other groups may oppose it. Atlanta-based Delta notified the Pension Benefit Guaranty Corp. in June of its intent to seek termination of the plan.
"Unless the pilot plan is terminated, Delta will very soon face an operational and financial crisis that will prevent it from emerging from Chapter 11," the airline said in its filing.
"Delta likely could not survive an operational disruption of this magnitude," the airline said.
Delta said that if Bush signs the relief legislation it believes it can emerge from Chapter 11 without terminating its non-pilot pension plan, because that plan does not have a lump sum feature.
http://my.earthlink.net/article/top?guid=20060804/44d2c640_3ca6_1552620060804511598176