United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2005-07-13 monographic deposited born digital 25 p. GA 1.13:GAO-05-834T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-05-834T P0b002ee18037b771 f:d05834t DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-05-834T machine generated eng fdlp REPORT GAOREPORTS-GAO-05-834T GAO-05-834T Airlines Bankruptcy Commercial aviation Competition Cost analysis Cost control Economic analysis Financial analysis Losses Pensions Transportation industry Testimony A29757 Since 2001, the U.S. airline industry has confronted unprecedented financial losses. Two of the nation's largest airlines--United Airlines and US Airways--went into bankruptcy, terminating their pension plans and passing the unfunded liability to the Pension Benefit Guaranty Corporation (PBGC). PBGC's unfunded liability was $9.6 billion; plan participants lost $5.2 billion in benefits. Considerable debate has ensued over airlines' use of bankruptcy protection as a means to continue operations, often for years. Many in the industry and elsewhere have maintained that airlines' use of this approach is harmful to the industry, in that it allows inefficient carriers to reduce ticket prices below those of their competitors. This debate has received even sharper focus with pension defaults. Critics argue that by not having to meet their pension obligations, airlines in bankruptcy have an advantage that may encourage other companies to take the same approach. GAO is completing a report for the Committee due later this year. Today's testimony presents preliminary observations in three areas: (1) the continued financial difficulties faced by legacy airlines, (2) the effect of bankruptcy on the industry and competitors, and (3) the effect of airline pension underfunding on employees, airlines, and the PBGC. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-05-834T/html/GAOREPORTS-GAO-05-834T.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-05-834T/pdf/GAOREPORTS-GAO-05-834T.pdf GAO-05-834T https://www.govinfo.gov/app/details/GAOREPORTS-GAO-05-834T Testimony GAO-05-834T; Commercial Aviation: Structural Costs Continue to Challenge Legacy Airlines' Financial Performance; Airlines Bankruptcy Commercial aviation Competition Cost analysis Cost control Economic analysis Financial analysis Losses Pensions Transportation industry Public Law 108-218