U.S. Bankruptcy Court Judge Robert Faris delayed the plans today to allow a federal agency, which was to take over responsibility for most of Aloha's pensions, to question the deal.

Faris told attorneys and representatives for Aloha this morning that there is "no way" they will be able to proceed with their plans by Thursday. Aloha had said that up to $100 million in financing was contingent upon it exiting bankruptcy protection this week.

Attorneys for Aloha Airlines and Aloha Airgroup, Inc., said yesterday that terminating the employee defined benefit plans is a condition of Aloha's prospective new owners, California billionaire Ron Burkle's Yucaipa Companies and former NFL football star Willie Gault's Aloha Aviation Investment Group. They plan to add up to $100 million of capital into Hawai'i's second-largest airline.

"I hope you have a Plan B," Faris said.

The Pension Benefit Guaranty Corp., the federal agency which insures corporate pension plans, has challenged Aloha's plans to terminate its union pension plans and turn the responsibility over to the PBGC.

The PBGC has struggled with its own ballooning deficit, in part, because several other airlines have defaulted on their defined benefit plans.

United Airlines and US Airways used bankruptcy earlier this year to transfer their employee pension liabilities — a combined $9.6 billion — onto the federal guarantor agency. Delta Airlines and Northwest Airlines, which both filed for Chapter 11 bankruptcy protection in September, could do the same.

The PBGC, which insures defined-benefit plans of 44 million people and takes over the plans of bankrupt companies, reported a deficit of $22.8 billion at the end of its 2005 fiscal year on Sept. 30.

The federal agency said it assumed responsibility for the pension benefits of an additional 235,000 workers and retirees in 2005, bringing the total to 1.3 million, and paid benefits of $3.7 billion, up from $3 billion in 2004.

Premiums per participant, paid by companies to the agency, totaled $1.5 billion.