According to S&P, DL has the largest underfunded pension obligation, at $5.3Billion. Next, at $3.5Billion is NW, $2.7Billion at AA and $1.6Billion at CO.
They don't expect a mass Chap 11 filing just to dump pension obligations, but they think carriers facing financial trouble may do so. UAL was able to obtain permission last week to transfer $6.6Billion over to the PBGC, on top of the $3Billion from USAirways earlier, which has set a precedent for them to follow.
Carriers are lobbying congress for more time to fund their obligations, outside Chap 11.
This contrasts with airlines like Southwest and JetBlue, with 401K plans, which have no funding gaps. And of course, both are making money.
Here in the UK, BA has an underfunded deficit of £1.4Billion ($2.7Billion), and from next year will have to carry that obligation on their balance sheet.(With a market cap of £2.8Billion, that is half their equity!)
I cannot see oil going back to the good old days when it was $10/BBl, or fares rising steeply, so it looks like the defined pension plans will have to go. Question is, who will do it first??