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Delta hits more turbulence

Alisa Roth Jun 8, 2006

TEXT OF STORY

SCOTT JAGOW: To offset the cost of fuel, Delta said this morning it’s gonna jack up some fares: $10 dollars each way on transatlantic flights. Even though it’s bankrupt, things have been looking better for Delta. Last week, it signed a deal with pilots to save almost $300 million a year. But the government’s saying woah, hold on a sec here. Alisa Roth has more.


ALISA ROTH: Delta’s planning to get rid of the pension plans for its pilots fairly soon.

Delta’s promised its pilots $650 million to make up for some of the money they’ll lose when the pension disappears, but the Pension Benefit Guarantee Corporation, or PBGC, calls the deal unfair.

That’s the agency that gets stuck with the tab for dumped pensions. It filed an appeal in US District Court late yesterday.

Roger King is an airline analyst at Credit Sights.

ROGER KING: Any money that goes to anybody to pay back for losing future pension benefits should go to the PBGC, to help the PBGC pay the benefits as prescribed by law.

Other airlines have canceled their pensions trying to get out of bankruptcy. And this isn’t the first time the PBGC has complained. The agency settled out of court with United. King expects a similar outcome at Delta.

In New York, I’m Alisa Roth for Marketplace.

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