Senate panel to hear bill on US Airways pension

Measure would allow airline to restructure plan

January 10, 2003|By Julie Hirschfeld Davis | Julie Hirschfeld Davis,SUN NATIONAL STAFF

WASHINGTON - A Senate panel will hold a hearing this month on legislation to allow the bankrupt air carrier US Airways, the nation's sixth-largest airline, to restructure its pilots' pension plan to obtain a $1 billion federal loan.

The measure in question would allow the Pension Benefit Guaranty Corp., a federal agency that insures private pension plans, to approve an unusual move by US Airways to restructure its plan.

The airline, which has estimated pension obligations of $575 million for 2004 and $333 million for 2005, wants to terminate the plan and immediately reinstate it, which would give US Airways 30 years to pay off those obligations.

Republican Sens. Arlen Specter and Rick Santorum, both of Pennsylvania, home to about 18,000 US Airways workers, secured a pledge last night from incoming Senate Finance Committee Chairman Charles E. Grassley of Iowa to schedule a session on the proposed bill.

Grassley and senior Finance Committee Democrat Max Baucus of Montana agreed to the hearing after blocking attempts by the Pennsylvanians to pass the measure in an eleventh-hour motion.

Without the legislation, Specter said, the airline will not be able to secure the $1 billion loan it needs to emerge from bankruptcy.

US Airways is rushing to resolve the issue before a hearing Thursday in U.S. Bankruptcy Court where it will present its reorganization plan.

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