WASHINGTON (Reuters) - A federal bankruptcy judge Friday approved a settlement between US Airways Group and the U.S. Pension Benefit Guaranty Corp. that resolves about $2.7 billion worth of claims.

The settlement gives the pension agency an ownership stake in the airline and helps clear the way for US Airways to emerge from bankruptcy as well as complete its merger with America West Airlines this fall.

"Obviously we've reached the conclusion that it's in the best interest of the agency," Jeffrey Cohen, the PBGC's lawyer, told the court. There were no objections raised before it was approved by Judge Stephen Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia.

Under the settlement deal, US Airways would pay $13.5 million in cash, give the PBGC a $10 million note and 70% of unsecured creditors stock, according to the motion filed in court.

"Debtors believe that achieving certainty now with respect to the amount and priority of the PBGC claims is critical to their prompt and successful reorganization," US Airways said in its motion.

US Airways' had underfunded plans covering its flight attendants, mechanics and certain non-union employees by $2.5 billion. The PBGC became trustee of those plans Feb. 1 and will guarantee $2.3 billion of that liability.

The government estimates that the plans were 40% funded with $1.7 billion in assets to cover $4.2 billion in benefits promised by the airline.

Earlier this year Judge Mitchell approved US Airways' proposal to terminate the latest plans, a move the airline hopes will save $100 million annually.

The agency assumed $726 million from the carrier's pilots' plan in 2003 during the airline's last trip through Chapter 11. US Airways created a less generous pension plan for its pilots and is doing the same for other workers whose plans have been terminated.

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