MORE PENSION TROUBLE AHEAD

It looks like Delta and NorthWest will try to dump their underfunded pension obligations on the Feds.

Bankruptcy will change Delta, Northwest
Sep 16, 8:08 AM EDT
By HARRY R. WEBER and JOSHUA FREED
AP Business Writers

Delta said it does not plan to make the next scheduled contribution to its pension fund. Northwest had a $65 million pension payment due Thursday, but said in a regulatory filing Tuesday that a claim against its assets for nonpayment could be avoided if it filed for bankruptcy first. Some analysts expect both airlines to terminate their pensions and dump the responsibility on the federal government like UAL Corp.'s United Airlines has done in its bankruptcy case. Northwest Chief Executive Doug Steenland has said he wants to avoid that.

Delta and Northwest have been seeking pension-law changes that would let them spread out payments to their pensions, but the relief they may ultimately get may not be enough to save the plans. The head of the Pension Benefit Guaranty Corp. said Thursday that Delta and Northwest have a responsibility to meet their pension funding requirements. The federal agency said that Delta's pension is underfunded by $10.6 billion and Northwest's by $5.7 billion.

Delta's debt stands at $28.3 billion; Northwest's at $17.92 billion.