WashingtonWire - 2004-04-26

Airlines Able To Defer Pension Contributions

United Airlines, US Airways and other financially troubled airlines on April 10 won more time to shore up their employee's pension plans when President Bush signed legislation allowing them to defer $1.3 billion in payments. United said the two-year reprieve would be enough to help it emerge from Chapter 11 bankruptcy protection by June 30. "This legislation will ease the burden of funding our pension obligations on an accelerated basis, to the benefit of our employees who are working tirelessly to serve our customers and build a stronger company, while we continue to execute successfully on our business plan," said Glenn Tilton, United chairman, president and CEO. United must decide how to pay a $4.8 billion obligation to its employees' retirement plan before it can emerge from bankruptcy.

The new law gives the airlines two years to reach agreements with their labor unions on how to cut pensions costs. It reduces by half the amount airlines must contribute in the next two years, freeing up that cash for other purposes. Airline pension funds operated by seven carriers currently are underfunded by $20.5 billion because their assets have been drained by low interest rates and the poor performance in the stock market in recent years. The seven airlines include: Alaska, American, Continental, Delta, Northwest, United and US Airways. Duane Woerth, president of the Air Line Pilots Association, which represents 64,000 pilots at 42 U.S. and Canadian airlines, said, "This legislation will be a critical part of the financial recovery plans of several of our carriers, and that will mean more pilots working and more pilots' futures remaining secure."

FAA: Icing May Impact Commuter Flights

Frequent flyers of commuter aircraft may find themselves grounded more often next winter due to new technology announced by the Federal Aviation Administration that predicts when low-flying aircraft are at risk for inflight icing. The new Web-based Forecast Icing Tool, produced in cooperation with the National Weather Service, warns pilots up to 12 hours before their flights when planes flying under 18,000 feet are at risk for ice on the wings during flight, a hazard for commuter planes that fly at low altitudes. "One of the best ways to manage the effects of bad weather is to avoid it altogether," said FAA Administrator Marion Blakey. "With this tool, pilots can make critical flight decisions." The tool provides a high-tech color weather map and/or a flight route display of icing potential at flight levels between 3,000 to 18,000 feet. The user can select forecast times from three-, six-, nine- and 12-hour intervals to plan safe routes of travel.