WASHINGTON — Several bills being discussed by lawmakers would make it difficult for Delta Air Lines Inc. and Northwest Airlines Corp. to convince the courts, labor groups and other creditors that the airlines can no longer afford their defined benefit plans.
In several pension reform bills pending before Senate and House committees, Atlanta-based Delta and Northwest, Eagan, Minn., along with other airlines would receive an as-yet undetermined amount of time to make good on their unfunded liabilities.
"Legislation that gives the airlines more time to fund their plans could provide welcome relief" for them, said Harold Ashner, former assistant general counsel for the Pension Benefit Guaranty Corp. and now a partner with the law firm Keightley & Ashner LLP in Washington. "However, the reduced funding obligations could make it more difficult for the airlines to justify terminating the plans."
But Douglas J. Elliott, president of the Center on Federal Financial Institutions, a non-partisan, non-profit public policy institute in Washington, believes it's "an open-and-shut case" that both will seek to terminate their plans.