02/28/2003 - Updated 01:22 AM ET US Airways targets pilots' pension plan By Barbara De Lollis, USA TODAY ALEXANDRIA, Va. =97 With 10 months left in a 32-year flying career, US=20 Airways Capt. Joe Graham suddenly faces a retirement shock. Instead of the= =20 $175,000-a-year pension he'd counted on, Graham now thinks it could be=20 $90,000, if he's lucky. Or even much less.Graham is one of 5,700 US Airways= =20 pilots whose retirements may be crushed in the vise of their employer's=20 bigger money troubles. US Airways is asking a federal bankruptcy judge to=20 terminate the pilots' pension plan, freeing the company from about $1.7=20 billion in pension obligations and possibly clearing the way for its=20 emergence from reorganization in late March. A three-day court hearing on=20 the US Airways' motion is expected to conclude today in bankruptcy court=20 here.If the plan is terminated, pilots would receive up to $28,400 a year=20 from the Pension Benefit Guaranty Corp., which insures business pension=20 plans. US Airways also has offered to contribute $850 million to a new=20 scaled-down plan that would pay additional benefits but less than the=20 current plan offers.While terminating the plan could save thousands of jobs= =20 at US Airways, it would be a staggering blow for veteran pilots like=20 Graham. He has three children to put through college, and when he turns 60= =20 in December, he'll hit the mandatory retirement age for airline pilots. The prospect of losing most of his pension comes on top of pay cuts that he= =20 says have cut his salary 30% from $275,000 a year. He is one of US Airways'= =20 most senior pilots."You can rationalize these pay cuts. You can cut your=20 lifestyle back, you can not get a new car, you can cut back on your=20 travel," he says. "But, by God, they're not going to turn me loose at 60=20 unable to fly at $28,000 a year with three kids."Today in bankruptcy court,= =20 US Airways will argue that its survival rests on terminating the pension=20 plan. If it doesn't emerge from Chapter 11 next month, it could lose more=20 than $1 billion in financing and a critical deal for processing its credit= =20 card sales, which accounts for half its revenue."If we don't resolve this=20 issue, there will not be a company," says Jack Butler, US Airways'=20 bankruptcy lawyer.In a sign of how emotionally charged the issue is, more=20 than 100 pilots =97 most in uniform =97 have packed the bankruptcy courtroom= =20 and an overflow room to watch the hearing.US Airways says it got to this=20 point in part because the weak stock market and low interest rates devalued= =20 the current fund's investments and left it unable to meet obligations.The=20 situation is still tough. US Airways Chief Financial Officer Neal Cohen=20 testified this week that the airline is losing $2 million a day, and a war= =20 could cost it millions more. To afford payments to the pension plan, Cohen= =20 said, the company would need to save $600 million elsewhere over the next=20 three years, which he doesn't believe is possible.The airline tried to find= =20 ways to get around the payments, such as stretching them over 30 years=20 instead of seven. But it couldn't get authority from the PBGC or Congress=20 to do so.The Air Line Pilots Association is expected to mount its challenge= =20 today. The union contends that US Airways hasn't explored every alternative, such= =20 as trimming the $3 billion to $4 billion that the company expects to spend= =20 on regional jets over several years. ALPA also says US Airways' motion=20 raises contract issues that should be settled under labor laws, not=20 bankruptcy laws.Meanwhile, the issue is stirring distrust among the pilots.= =20 Many believe the company is using the savings from their pension to offset= =20 contributions to other pension plans, including management's. US Airways=20 denies that.Pilots were stung by Cohen's testimony Monday that the airline= =20 paid $35 million in advance pension payments to former chairman Stephen=20 Wolf, former CEO Rakesh Gangwal and former general counsel Lawrence Nagin=20 before its Chapter 11 filing in August.Charlie Couch, 58, has been flying=20 for US Airways for 16 years. He says termination could cost half his=20 pension payments. He thinks other aviation jobs will be hard to find=20 because many pilots have been furloughed since the Sept. 11 attacks, 1,800= =20 at US Airways. He and his wife are considering selling their dream house in= =20 Chester County, Pa."It still feels surreal," he says. "You do your flying.= =20 Everything looks normal. 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