Originally Posted by
OTZeagle1
Uhm, out of control debt took each to bankruptcy, the pension was just a piece of the debt. AMR went into bankruptcy and back out, with all their existing pension liabilities, NWA also left frozen.
AS and all three legacy carriers NB wages have been within pennies of each other if averaged 2000-2018 and guess what many of us still have a fully funded pension.
I agree, if everyone does well, we will all do well. I hope everyone survives this thing, I hope it’s our turn as skilled labor to finally win.
And being around for more then 90 years in this chaotic industry and never claiming bankruptcy is remarkable, how do I know… We are the only US airline to do this!
Agree to disagree, pension debt was a key to going BK. Legacies had contract items that were never going to be forgone except thru BK court.
1. Huge $$$$ raises in the 2000's time frame at UAL and DAL at least (remember the Delta dot).
2. Full pensions / medical for retirement (now gone) oh and back then 60 was the age.
3. Installing PBS
4. Frozen PILOT pensions handed to PBGC thru BK court to deal with.
5. 401K only retirement for new pilots
All these were items that the legacies thought they needed to be competitive in the new non-regulated environment going forward competing with younger upstarts like SWA. Only achievable through BK court.
Heck I remember in 1999/2000 Delta petitioned the Feds/IRS to allow it to deposit MORE MONEY into their pensions than the law allowed (prepay because the market had climbed so much they were technically "overfunded") but the Feds said "no, no no, those are profits and must me taxed and realized", a few short years later the tables were turned.
Turns out you can't get to BK court until you run the ship up on the banks, so yes there were many losses and debts that had to be realized before BK court was going to be an option, but once mgmt realized that only way to reset pilot labor was the way to compete going forward, BK court was the destination.
Lastly, back then legacies were continually competing against a host of old/new sizable LCC's (no pensions or retiree healthcare and paying a fraction of the wages the legacies were) that were destroying yields throughout the US like Continental, US Air, America West, AirTran etc.
Best thing that has happened to this industry is actually consolidation, followed by a tightening of the labor market so that even new entrants are now forced to pay near market wages.
I'm afraid though that if demand quickly halves, we'll return again to an industry where you can fly cross country or to Hawaii for "peanuts" and everyone will lose money, some just more than others. That environment will not be "good" for any company, it may suck less for some, but all will experience downward pressure on wages/employment and career prospects.
Yes though, congrats to Alaska Air for avoiding BK court.