The federal government approved US Airways' bankruptcy reorganization plan yesterday and reiterated its conditional approval of the airline's $900 million loan guarantee.

In his letter to US Airways executives yesterday, Daniel G. Montgomery, executive director of the Air Transportation Stabilization Board, wrote that the airline had "pursued a disciplined approach to executing its restructuring plan and reacting to changing economic conditions in the airline industry."

The conditional approval was needed to obtain the remaining $200 million in interim financing from US Airways' lead investor, Retirement Systems of Alabama, the airline has said in court documents.

But to obtain the loan guarantee, US Airways still has to win approval of its reorganization plan from U.S. Bankruptcy Court Judge Stephen S. Mitchell, whose decision could come as early as March 20. In addition, the airline has to successfully resolve the contentious issue of its pension fund.

US Airways executives said last month that they would ask the federal bankruptcy court to terminate its pilots' pension plan, which is underfunded by about $2 billion. The airline said it was developing a new plan which could reduce future pensions for pilots by about 50 percent. It has to gain approval for its new approach from the bankruptcy court and the Pension Benefit Guaranty Corp. to obtain the loan guarantee.

US Airways pilots have vowed to fight the airline's effort to dissolve its plan. Roy Freundlich, a spokesman for US Airways' pilots union, said the group filed a grievance with the airline and with the National Mediation Board, arguing that the airline's plan was against its current labor contract. The union also plans to file its objection to the bankruptcy court at a hearing Feb. 20.

"The company has provided no acceptable proposal or alternative for us other than to oppose the termination," Freundlich said. He described the airline's intent as "extraordinary, excessive and unfair."

The Arlington-based airline applied for the loan guarantee in June and won conditional approval. But after it filed for bankruptcy in August, the ATSB, which reviewed the airline's application, said the airline had to submit its reorganization plan to the board for another review to secure the guarantee.

Since its Chapter 11 filing, the nation's seventh-largest airline has trimmed nearly $1.9 billion a year in costs from its employees, aircraft leaseholders and suppliers.