CHICAGO, May 18 (Reuters) - The union representing flight attendants at bankrupt United Airlines on Wednesday appealed a judge's decision last week to allow the carrier to turn its underfunded pension plans over to U.S. pension insurers.

The Association of Flight Attendants hopes a higher court will overturn the May 10 bankruptcy court ruling that lets United, a unit of UAL Corp (UALAQ.OB: Quote, Profile, Research) , pass along its workers' pensions to the Pension Benefit Guaranty Corp. The AFA said it filed the notice of appeal in the U.S. District Court for the Northern District of Illinois.

The No. 2 U.S. carrier, in bankruptcy since December 2002, has said its settlement with the PBGC would save about $645 million annually over five years, although its current and retired workers stand to lose some retirement benefits.

"United's high-priced lawyers used a cheap procedural maneuver to preempt our rightful day in court to defend our plan under the standards of pension and bankruptcy law," said Greg Davidowitch, president of AFA's United executive council, in a statement.

The AFA has promised surprise intermittent strikes if the carrier were to terminate their pensions. So far, the workers have not carried out that threat.

"We strongly believe the bankruptcy court's decision was correct," said UAL spokeswoman Jean Medina. "We recognize that this process is a difficult one for our employees and retirees, but the agreement is critical to the future of United, as we strengthen the financial platform the company needs to attract exit financing and compete effectively."

Elk Grove Village, Illinois-based United previously reached concession deals with unions but has said it needs an additional $2 billion in cost cuts, including $725 million from labor, because of high fuel prices and heavy competition that has kept air fares low.

United is seeking court permission to void collective bargaining agreements with its mechanics and other ground workers. A trial on the matter was set to resume on Thursday.

On Wednesday, the airline was negotiating with the International Association of Machinists and Aerospace Workers, the union representing UAL ground workers, on a new labor deal. The embattled carrier hopes to extract about $176 million in average annual savings from the workers.

IAM President Randy Canale said in a message posted on the union's web site that the union had made "significant progress" toward a deal. "However, important issues regarding jobs and pensions remain unresolved at this time," Canale said.

On Monday, United reached a deal with the Aircraft Mechanics Fraternal Association that would cut the mechanics' pay by 3.9 percent and give the carrier about $96 million in average annual savings.

The deal still requires the approval of AMFA's membership and a bankruptcy judge.

Both the IAM and AMFA have authorized their unions to call strikes in defense of their labor contracts.