Delta, Northwest get pension relief bill introduced

By Ted A. Knutson

Washington, April 21 - Legislation which would allow Delta Air Lines Inc. and Northwest Airlines, Inc. to spread upwards of $10 billion in unfunded defined benefit pension plan liabilities over 25 years instead of the current four years was introduced in the Senate Wednesday.

The Employee Pension Preservation Act of 2005 (Senate Bill 861) is being sponsored by Republican Johnny Isakson from Atlanta-based Delta's home state of Georgia and co-sponsored by Jay Rockefeller of West Virginia, the ranking Democrat on the Senate commerce committee's aviation subcommittee.

Delta chief executive officer Gerald Grinstein said the bill is being sent to the Senate finance committee.

But Congressional sources knowledgeable about the carriers' proposal said it would likely be heard only as part of a broad pension reform bill.

The White House and a fair number of House and Senate members have voiced opposition to an airline-specific measure.

While Continental Airlines, Inc. and American Airlines Inc. would also benefit from the legislation, Delta and Egan, Minn.-based Northwest are sounding the alarm the loudest.

Both carriers have said pension relief is vital to keep them out of bankruptcy.

In a statement supporting the bill, Northwest noted its plans were fully funded as late as 2000.

The company blamed its nearly $4 billion pension deficits since then on falling interest rates, declining stock prices and increases in retiree benefits.

Delta and Northwest declined to say how much the legislation would save them yearly.

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