Intended To Offset Losses From Termination Of Pension Plan

On Monday, Delta Air Lines agreed to pay its retired pilots an extra $719 million in unsecured claims, which if approved should help offset at least some of the losses incurred when Delta terminated the pilot pension plan in September.

The Associated Press reports the payback plan has the support of Delta's official committee of unsecured creditors. The Air Line Pilots Association, the union that represents Delta's active pilots, is a member of that committee.

If approved by the bankruptcy court, the additional claims will bump the total amount of unsecured claims for retired pilots to approximately $800 million. That total is separate from the $2.1 billion unsecured claim Delta's active pilots negotiated as part of their concession agreement earlier this year.

That does not mean either current or retired pilots will see that much, however, as unsecured creditors typically end up with a fraction of what they're actually owed. The final amount won't be determined until Delta emerges from bankruptcy.

Delta is scheduled to file its reorganization plan with the court by mid-January 2007.

In the face of a hostile takeover attempt by US Airways Group, Delta management and employees have rallied to support the airline's emergence from Chapter 11 as a standalone carrier.

FMI: www.delta.com