Aw, c'mon... Defaulting on their pension plans is the WHOLE IDEA...!

yeah, the cost of jet fuel is a factor but you can't tell me that delta and northwest weren't watching united's smooth move of handing their underfunded pension plan over to the feds... hey, if they can do it without consequences, why not us...? oh, and btw, we can destroy the unions at the same time... heckuva deal...

The US agency that insures private pensions warned Delta Air Lines and Northwest Airlines on Thursday not to skip payments to their pension plans while they are in bankruptcy.

"Northwest and Delta continue to be responsible under the law for making their pension contributions," Bradley Belt, director of Pension Benefit Guaranty Corporation (PBGC), said in a statement a day after both airlines filed for bankruptcy.

The PBGC said Northwest Airlines' pension plans were USD$5.7 billion underfunded and the PBGC would have to take over USD$2.8 billion of this amount if the plans were to terminate, leaving employees with a USD$2.9 billion loss.

On Wednesday, PBGC said Delta's plans were USD$10.6 billion underfunded. The PBGC would pick up USD$8.4 billion of this if Delta's plans were taken over by the agency.

and the employees, rightly so, are quaking in their steel-toed boots...

Employees at newly bankrupt Delta Air Lines and Northwest Airlines have every reason to fear that any leverage they once had in contract negotiations has evaporated, analysts said on Thursday.

[...]

Northwest currently is battling a mechanics' strike and has continued flying with the aid of replacement workers and outside vendors.

The bankrupt carriers could use court protection to extract the savings they claim they need to survive. Analysts say they will take their cues from United Airlines and US Airways to cut costs and dump their under-funded pensions on government insurers, a move that saves airlines money, but erodes workers' retirement benefits.

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