Continental Airlines Inc. on Tuesday said it injected $50 million into its defined benefit pension plan after borrowing from a secured term facility, extending its credit line to $350 million.
The investment comes in the wake of United Airlines' default on more than $9 billion in pension commitments last month — the largest corporate-pension default in U.S. history. In May, a federal bankruptcy judge permitted United to shift responsibility for the funds to the government's pension agency.
About 120,000 current and retired United workers are covered by the pensions, including 62,000 active employees.
In an effort to assuage its own workers, Continental injected new money into its pension plan, bringing its contribution to $180 million so far this year. The majority of Continental's 41,000 workers are covered by the plan, a spokeswoman said.
"Our employee pension plan continues to be a high priority," said Continental Chairman and Chief Executive Larry Kellner in a statement. "We are working hard to fulfill our pension obligations and keep our promises to our employees."
Continental contributed $372 million to its pension plan in 2003 — $283 million more than the minimum required, said the spokeswoman. The company carried the credit over and did not contribute to the plan in 2004.
The company's initial $300 million borrowed under the term loan facility closed June 1, and with the closing of the $50 million amount, the facility is fully funded, Continental said.
