Judge says US Air can terminate pilot pension plan = = = = Sunday March 2, 1:33 AM EST = (Adds company statement, updates) By John Crawley ALEXANDRIA, Va., March 2 (Reuters) - A federal judge ruled on Saturday ni= ght that US Airways Group Inc. (UAWGQ) could terminate its pilots' pensio= n plan, saying it was a disheartening option to help save the bankrupt ca= rrier. Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern Distr= ict of Virginia cleared the way for the company to seek federal governmen= t approval of its proposal to replace the pension plan with a cheaper one= =2E The pension plan covers 3,600 active and 1,100 retired pilots, some of wh= om could lose up to 75 percent of their benefits under the proposal. US Airways says it can no longer afford the pilots' retirement plan and w= ants to replace it with one that would offer $850 million over seven year= s. The carrier says resolving the $1.6 billion pension liability is the l= ast major hurdle it faces in Chapter 11 reorganization. = The company has said resolving the pension question is also necessary to = receive $200 million in emergency financing from its biggest investor, Re= tirement Systems of Alabama, and a $1 billion government-backed loan. The union had said the company did not use accurate financial calculation= s or consider every alternative to ending the plan. Mitchell disagreed, s= aying the company took reasonable action in the face of severe financial = distress. "It is disheartening that I am called upon to make a ruling on this motio= n. Some pilots may get something close to what they would have gotten. Ot= hers will suffer a great deal," Mitchell said. IMMEDIATE TALKS SOUGHT "This is not a happy case. When it comes to distributions and outcome, pe= nsioners will get more than any other creditors," said John Butler, the l= ead bankruptcy attorney for the airline. The company hopes to emerge from bankruptcy protection by the end of the = month. Mitchell said the airline must still resolve questions about whether the = pension change would violate the pilots' contract. The pilots contend tha= t any change must be part of collective bargaining. US Airways called for immediate negotiations with the Air Line Pilots Ass= ociation to address the contract dispute, which is the subject of a griev= ance hearing before the National Mediation Board on March 13. "We regret the impact that the plan termination will have on our pilots b= ut the ultimate goal must be to save this airline and the jobs of almost = 35,000 dedicated employees," said David Siegel, US Airways president and = chief executive officer. "We believe we can find a mutually achieved solu= tion to implement a new pension plan." Roy Freundlich, the pilots' union spokesman, said the labor group would e= xplore all its legal options and alternatives under its contract with the= airline. "This is not over," he said. Any new plan would only cover active pilots, while retirees would have to= accept whatever level of benefits are approved by the Pension Benefit Gu= arantee Corp., the agency that oversees corporate pensions. = =A92003 Reuters Limited. = Roger EWROPS