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Last Updated: Thursday, 30 December, 2004, 23:07 GMT
United pilots' pensions protected
United Airlines jet
United is far from finding clear business skies
United Airlines will have its pension scheme for pilots underwritten by the US agency created in 1974 to protect workers' retirement rights.

The Pension Benefit Guaranty Corp (PBGC) said it will have to guarantee a shortfall of about $1.4bn (726m).

It will cover more than 14,000 current and retired United pilots and will not affect the pensions of other employees.

United Airlines is battling bankruptcy and wants to use money set aside for pensions to finance running costs.

The company also has agreed with workers to trim wages and is looking at how else to limit outgoings.

The company has a $2.9bn hole in its pension schemes.

Not alone

United Airlines' pilots did not contest the company's plans to end their pension scheme because they won a number of concessions.

"Retirees will continue to receive monthly benefit cheques without interruption and other pilots will receive benefits when they retire," Bradley Belt, the PBGC's chief executive said.

United Airlines, owned by UAL Corp, filed for bankruptcy protection in December 2002 and is not the only US carrier in trouble.

They have been hit by increased competition, a dip in demand for air travel and soaring oil and jet fuel prices.

United Airlines has been trying to get state help, but has had its requests for an emergency loan of more than $1bn repeatedly turned down.

The company has not said when it expects to emerge from Chapter 11 bankruptcy protection. Analysts said that it is unlikely to happen before autumn 2005.

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