May 12, 2005 -- More than 120,000 former and current United Airlines
employees effectively had their pensions cut in half this week when
United dumped its plans on the federal government and the American
taxpayer. That, by now, I am sure you know.

Here's something you probably don't know and that few mainstream media
outlets thought worthy of mention this week: One United employee was
exempt from the draconian consequences of the largest pension default
in U.S. history.
Who's that lucky boy? None other than United chief executive Glenn
Tilton. His $4.5 million retirement plan is comfortably salted away in
a trust fund that the airline created for him. The bankruptcy court
rubber-stamped the deal shortly after United declared Chapter 11 in
December, 2002.

Tilton is also the highest-paid Big Six airline executive. According to
Forbes, Tilton earned $1.24 million last year. That's almost twice as
much as American Airlines chief Gerard Arpey earned and about three
times what Delta Air Lines chief Gerald Grinstein received.

But this column is not about Glenn Tilton, whose first move after
taking the United job in September, 2002, was to ensconce himself in a
corporate apartment at the Four Seasons Chicago at a reported cost of
more than $15,000 a month. His 33-month reign of error is already
well-documented: The airline has been bankrupt for 29 months and has
yet to produce a Plan of Reorganization. According to the Associated
Press, United's losses have exceeded $5.8 billion since entering
bankruptcy. And the airline's operating losses are rising, not falling.
It's not for nothing that CNN anchor and aviation expert Miles O'Brien
this week called Tilton and his management team "morons."

No, this column is about what all this Big Six mismanagement is costing
us taxpayers. The price of letting the Big Six conduct business as
usual is nothing short of staggering.
Let's start with the post-9/11 bailout of $4.5 billion. Then we gave
twice-bankrupt US Airways nearly $1 billion in federally guaranteed
loans. That money has been partially repaid and the rest is supposedly
secured with real assets, but I wouldn't bet on seeing any more of that
dough. There's also Airline Bailout II, the almost-forgotten $3.5
billion gift to the Big Six appended to the initial Iraq War
appropriations bill. Add perhaps $1 billion in outstanding loans, notes
and bills that United and US Airways will never pay to
taxpayer-supported airports and local development agencies.
And now come the really big numbers. There's the $3 billion in pension
liability assumed from US Airways earlier this year by the Pension
Benefit Guarantee Corporation (PBGC). We added United's pension
shortfall on Tuesday and that is estimated at $9.8 billion. If the
other Big Six carriers follow the United-US Airways pensions path,
that'll be $20 billion more dumped in our taxpaying laps.
That's $40 billion blown on six private companies that have a total
market capitalization of $3.4 billion plus a couple of rolls of
quarters for the moribund shares of United and US Airways.

That, fellow travelers and taxpayers, is madness. It is propping up six
companies that have proven that they cannot or will not sell a product
we want to buy at sustainable prices that we want to pay. It is
allowing six companies in an endless state of corporate welfare to
threaten the long-term growth of healthy airlines like JetBlue and
Southwest and potentially profitable carriers such as AirTran, America
West and Frontier.
So rather than continue to subsidize fools like Tilton with taxpayer
money, I'd like to suggest something I first proposed almost three
years ago: Nationalize, reorganize and refloat the Big Six.
This would have been a lot cheaper had we done it three years ago, of
course, but it's still a better deal than continuing to throw money at
Tilton and the boys. Forget about the $10 billion that we've already
spent on bailouts and such. That's gone forever. Just focus on the $30
billion in Big Six pension liability that's staring us in the face.
What if we took just a fraction of that money and bought up the Big
Six? Then we could take the rest of the $30 billion and put it into
this new enterprise, which would reclaim the Big Six pension liability
and unburden the underfunded PBGC.
What would we do with the Big Six operationally? We'd rationalize the
prices, simplify the in-flight services, streamline the fleets and
create fare structures that would enhance revenue, not depress it.
When they emerged from the makeover, the Big Six might only be the Big
Three. But they would be strong--with managers motivated to make a
profit and workers fighting to save their pensions. Then we'd take the
new airlines public again and leave them free to compete like normal
businesses.
Don't like my idea? Fine. Then I'll ask just one question: Are you
prepared to staple $30 billion in Big Six pension liability to your tax
bill and leave morons like Tilton running the show?
For that kind of money, I think we can do a lot better. Hell, for that
kind of money, we can even afford to buy Glenn Tilton a first-class
ticket so he can retire to Tahiti with his court-approved, guaranteed
pension.