Delta Air Lines, Atlanta, plans to file a notice Monday with the PBGC to terminate its pilots' pension plan effective Sept. 2, according to a letter CEO Gerald Grinstein sent to several U.S. senators today.
Mr. Grinstein told the senators that terminating the plan was the only way for the airline to emerge from Chapter 11 bankruptcy protection successfully. Even if a pension reform bill containing funding relief for airlines were to be approved by Congress, Mr. Grinstein wrote, "Delta's expected costs resulting from the plan in the near term alone would exceed $1 billion."
PBGC spokesman Jeffrey Speicher had no comment but said the U.S. Bankruptcy Court in New York would have to approve the termination. The PBGC has appealed an agreement between the pilots and Delta to terminate the plan.
Kelly Collins, spokeswoman for the Delta Air Line Pilots' Association, was not available for comment at press time.
The $7 billion pension plan is underfunded by $10.6 billion, of which the PBGC would be responsible for $8.4 billion