Q: Will I get paid if the airline is in bankruptcy?

A: Yes. Wages, salaries and sick leave are considered to be normal administrative expenses for a company operating under the protection of a bankruptcy court.

Certain pre-petition claims for such items as back pay, unpaid medical expenses and other benefits are given priority status in bankruptcy, meaning that they are paid before other general unsecured claims. However, the maximum amount of such claims that can be given priority is $4,650 per employee.

Q: Will collective bargaining agreements remain in effect during the bankruptcy proceedings?

A: The various unions at US Airways will continue to represent employees as they did in the first bankruptcy reorganization. But once the company files for and receives bankruptcy court protection, it could ask the court for permission to reject current bargaining agreements under rules detailed in Section 1113 of the Bankruptcy Code.

Section 1113 basically ensures that negotiations take place between the company and a union before a rejection request can be made. It also lays out a number of statutory requirements that the debtor must meet. Those requirements include but are not limited to making a complete proposal to the unions, negotiating in good faith and proving that the modifications are necessary to the reorganization.

If the court agrees that the company has met the required conditions, it may authorize the rejection of a contract. The company could then implement its last offer to the unions. The unions would then have the right to strike.

Q: What would happen to retiree health and insurance benefits under a Chapter 11 bankruptcy?

A: Since the Employee Retirement Income Security Act grants no rights to retirees to health and insurance benefits, Chapter 11 debtors often look to terminate or modify those benefits to cut expenses.

The Bankruptcy Code Section 1114 permits Chapter 11 debtors to modify or terminate such benefits if it can meet statutory requirements, some of which are similar to the requirements of Section 1113.

Section 1114 was enacted in 1988 after the former LTV Steel Corp. decided to discontinue paying health benefits for approximately 70,000 retirees immediately upon filing for bankruptcy in 1986. The court subsequently reinstated the benefits. But years later, in 2002, a bankruptcy judge allowed a liquidating LTV to stop paying for retiree health benefits.

Q: What could happen to the pensions of active workers?

A: US Airways intentions in bankruptcy are not known. But the options vary depending on the type of pension involved, whether it is a defined benefit, such as a pension, or a defined contribution plan, such as a 401(k). US Airways employees have a mix of both.

As part of a bankruptcy restructuring, the company could elect to terminate defined benefit plans -- those plans that promise to pay a specific monthly amount at retirement. If the terminated plan does not have enough assets to pay all of the vested and funded benefits for the beneficiaries, the federal Pension Benefit Guaranty Corp. may be required to guarantee payment of vested pension benefits subject to certain regulations and maximum payment levels.

UAL Corp.'s United Airlines, whose pension plans have $8.3 billion in unfunded liabilities, stopped contributing in July to plans that cover nearly 120,000 employees, retirees and dependents and told a bankruptcy judge that termination is likely. Analysts fear a termination of United's pension plans would hit the PBGC with its biggest loss ever and set the stage for other troubled airlines to do the same. The PBGC would have to guarantee $6.4 billion of United's benefits

During US Airways' 2002 bankruptcy, the unionized pilots' leaders approved an agreement with US Airways to terminate the pilots' defined benefits plan and replace it with a defined contribution plan. The airline had said failure to strike the pension deal could scuttle its exodus from Chapter 11 and lead to liquidation.

As part of a restructuring under bankruptcy protection, the company could also elect to terminate defined contribution pension plans. Prior contributions made by the employees would be protected as would prior vested contributions made by the employer.

As employees already know from US Airways' prior bankruptcy, the company's stock could lose all value.