Delta Hit with 'Substantial' Pension Charge

November 14, 2002 ( - Delta Air Lines announced it would have to take a "substantial" noncash charge at the end of the year for its underfunded pension plans. The company did not specify the amount of the charge.

According to a Reuters news report, Delta said in a US Securities and Exchange Commission (SEC) filing that the pension charge wouldn’t adversely affect its earnings.

The company estimated 2002 over 2001 expenses for a variety of factors, including pensions, should increase by about $800 million.

Delta said it would have to take a likewise unspecified charge to cover severance, leaves of absence, and early retirement offrered as part of staff reductions.

The air carrier said in the SEC document that 2003 shouldn’t be any better with continued economic trouble and severe cost pressures.

The number of US companies suffering pension woes due at least in part to the slumping markets  has increased dramatically in recent months with the latest corporate quarterly financials filed with the SEC filled with the bad news.