United Airlines unions seek court order for pension payment

Airline Industry Information, Dec 1, 2004

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The trustee appointed to oversee the employee pension funds of United Airlines is applying for a court order to force the bankrupt airline to make up the hundreds of millions of dollars it owes in contributions before it leaves bankruptcy.

The motion filed by Independent Fiduciary Services (IFS) in a federal bankruptcy court calls for United Airlines to pay at least USD260m of the USD994m in pension contributions it has skipped since July 2004. IFS has taken the action on behalf of flight attendants, mechanics, ramp and public contract workers.

United Airlines is seeking to terminate its pension plans while in bankruptcy and replace them with contribution programmes as part of its cost cutting plans. A spokesperson for the airline said that it was acting to preserve cash reserves to aid its restructuring when it suspended pension contributions, reports The Associated Press.

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