Senators agree pension relief for non-bankrupt as well as bankrupt airlines
Senators agree giving pension relief only to bankrupt airlines gives them unfair advantage over the solvent airlines.
Under the plan Continental Airlines and American Airlines would get similar benefits as bankrupt carriers Delta and Northwest. The plan includes a 14-year pension payment period for payments that were supposed to be due within the next several years.
While Continental may not need the extension, their argument to the government was that airlines should be treated alike.
There is pending pension legislation in the House of Representatives that doesn’t contain airline aid provisions. The full Senate still must take up its pension reform legislation.
Delta’s pension plan is underfunded by $10.6 billion, and Northwest’s pension plan is $5.7 billion short.
Bankrupt United Airlines relieved from paying hundreds of millions of dollars’ worth of pension it owed by the bankruptcy court earlier this year, leaving the obligation to the federal government’s Pension Benefit Guaranty Corp., which insures pensions.
Charles Kao
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