US Airways, in its first move since filing for a second bankruptcy, said it intends to terminate its remaining defined benefit pension plans and will not make $110 million (€88 million) in pension payments due this week.

The announcement could see the transfer of a further $2.1 billion in pension liabilities from its machinists and flight attendants plans to the federal government. US Airways will be the first major carrier in this downturn to have abandoned all of its defined benefit plans.

US Airways also moved to reject the leases on 23 aircraft, mainly smaller propeller-driven models.

It said it had no plans to liquidate and ruled out "burning the furniture" through asset sales.

However, without labour concessions within the next 30 days there are doubts about the future of the airline's transformation plan, which centres on the purchase of 170 regional jets, from Embaer of Brazil and Bombardier of Canada.

The two aircraft manufacturers are the airline's largest unsecured creditors, with $1.46 billion in exposure for Embraer and $948 million for Bombardier related to future aircraft orders.

General Electric, through Gecas, its aircraft financing arm, is the third largest unsecured creditor with $278 million in unsecured debt.

Retirement Systems of Alabama, the pension fund run by Mr David Bronner, is also a big casualty of the filing.

Mr Bronner spearheaded a $240 million investment in the troubled airline, in return for a 36 per cent equity stake which is now expected to be worthless.

US Airways' pension move will add to concern about the future of the Pension Benefit Guarantee Corporation, the agency that insures defined benefit plans.

The corporation already has a deficit of $11.2 billion and could face $6.4 billion in liabilities if United Airlines terminates its pension plans.

United is expected to set out its plans in mid-October. - (Financial Times Service)