United Airlines has pretty good lawyers. They've found a way to get the government to bail out a company with large pension debts, without having to get any more than a bankruptcy judge to go along. The rest of the airlines will follow soon, and can companies like General Motors be far behind?
This is going to be a financial nightmare for the government. No longer does a Chrystler have to go hat in hand to the feds for help, In what is seemingly an unintentional result of bankruptcy law coupled with the federal pension guarantee, companies can dump their inconvenient pension funds on Uncle Sugar and walk off none the poorer. Last time we saw this kind of thing (the Savings and Loan crisis) it cost hundreds of billions of dollars. Considering that GM alone has underfunded its pension system by tens of billions, this one could go considerably higher over the next few years.
An odd result of this is that stockholders, usually the most unsecured of creditors, remain whole while normally-secured pensioners lose (as the federal guarantee has caps). In a reasonable world what should have happened is that the stockholders were wiped out, with ownership going to the pension fund. An IPO of new shares would issue, with the proceeds going to fully fund the pension system. Anything excess would be returned to the former stockholders. But that doesn't seem to be in the cards. Too bad.