A US bankruptcy court approved an agreement between Delta Air Lines and the federal pension insurer that allows the carrier to terminate its pilots' pension plan, a Delta spokesman said on Wednesday.

Delta, which rejected an USD$8.4 billion takeover bid by rival US Airways on Tuesday, hopes to emerge from bankruptcy protection in the spring of next year as an independent carrier.

The court's decision, which comes over objections from a group of more than 800 retired pilots, brings the airline a step closer to meeting that goal.

The Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures corporate pensions, will become trustee for the pilots' pension plan under the agreement.

In return, the PBGC will receive an unsecured claim of USD$2.2 billion when Delta emerges from bankruptcy. Delta will also distribute USD$225 million in unsecured debt to the PBGC.

Termination of the plan would be retroactive to September 2.

The airline has pledged to preserve pension accounts covering 90,000 non union workers and retirees, including flight attendants, when it steps out of court protection.