You have been sent this message from psa188@juno.com as a courtesy of the Washington Post - http://www.washingtonpost.com To view the entire article, go to http://www.washingtonpost.com/wp-dyn/articles/A3453-2003Jan30.html US Airways Hopes to End Pilots' Pension Program By Keith L. Alexander US Airways said yesterday that it will ask a federal bankruptcy court judge to terminate its pilots' pension plan, which is underfunded by about $2 billion. The action could cost the airline's 7,000 current and retired pilots billions of dollars in retirement payments. The pilots union said it will fight the airline's move with all means at its disposal. "The company is not going to simply steal from our pilots their earned pension benefits without a big, big fight," said pilot spokesman Roy Freundlich. "We are not ruling out any of our options." Freundlich said he would not "confirm or deny" whether those options included a strike, which the company says would be illegal, or an operational slowdown. The pilots could adopt a "flying-by-the-book" protest in which they would delay flights by meticulously -- and slowly -- going over all procedures and checklists. Either option could severely jeopardize the future of the Arlington-based airline by driving passengers to other carriers. A large passenger defection could cost the carrier much-needed revenue just two months before its planned emergence from Chapter 11 bankruptcy. The pension plan covering all employees is expected to have a shortfall of about $3.1 billion over the next seven years in large part because the weakened stock market has shrunk the plan's assets. The pilots' portion of the shortfall totals about $2 billion, said US Airways spokesman Chris Chiames. Chiames said that under the plan's termination, the airline's 1,100 retired pilots and those near retirement would receive the "bulk" of their current pensions. Chiames said he was unable to offer precise figures. "It's very important that everyone clearly understands that our pilots are not being wiped out. We are not minimizing the concerns the pilots have," Chiames said. "They have worked very hard for their pensions." In a letter sent to pilots Tuesday, David N. Siegel, US Airways president and chief executive, said terminating the plan was its "only remaining option." Siegel said the airline intends to create a replacement plan in conjunction with the Pension Benefit Guaranty Corp., a government agency that must approve and insure the plan. However, the Supreme Court in 1990 ruled in a case involving LTV Corp. that the company could not have the PBGC take over its pension plan and then create a new one to make up lost benefits. Siegel has said the pension liability had to be resolved for US Airways to obtain a $900 million federal loan guarantee and keep $200 million in interim financing. Freundlich said the new plan could reduce future pensions for pilots who have not yet retired by about 45 percent. "What they're doing to us will not be tolerated," he said. US Airways mandatory retirement age is 60, and the average age of its pilots is about 47, Freundlich said. Chiames said the new pension would reduce future payments by about 50 percent. He said the pilots cannot strike because the termination of the current plan does not violate the latest union contract. He said that union officials knew last month that the airline might have to terminate the plan when they agreed to the new contract. U.S. Bankruptcy Court Judge Stephen Mitchell of the Eastern District of Virginia is expected to rule on the termination at the airline's Feb. 20 hearing.