Carrier Says Move Saves $1 Billion Per Year

Bankrupt Delta Airlines says it now has permission from the court to abandon its pilot pension program -- tossing aside a huge obstacle in the way of the company's hopes of restructuring.

"This is a sad but necessary step," said Delta lawyer Marshall Huebner at a September 2 court hearing. "Delta could not propose any feasible plan of reorganization unless the pilot plan is terminated."

The pension plan was officially abandoned as of Saturday. The judge approved Delta's plan after a group of about 100 retired pilots withdrew its objections to the penion move.

Delta has since agreed to pay the group about a half-million dollars in legal fees and other expenses.

"It's something that had to happen and was going to happen," said Alan Sbarra, of the airline consulting firm Roach & Sbarra, to Bloomberg. "They need to be on an even footing with the other airlines."

The airline still has to get approval from the Pension Benefit Guaranty Corporation... the quasi-federal agency that oversees retirement plans nationwide.

With pilot pensions out of the way, Delta says it can save about a billion dollars a year. That, the company says, will make it a lot easier to find financial backers to fund its emergence from bankruptcy protection... where Delta has languished for almost a year.

Now... it looks like the airline might be back on its feet again sometime around the middle of next year.

FMI: www.delta.com, www.pbgc.gov