tailwheel48

Thought provoking piece on AA bankruptcy and PBGC!

The Last Word - Rewriting American Airlines' bankruptcy

HSLD

After that, I'd hate to be a "Bain guy" sitting in first class!

Great opinion piece on the PBGC, and good for the agency's director to take aggressive action to parry AMR's intended pension default. Unfortunately American Airlines labor will approve or disapprove the "term sheet" which includes shedding pensions. Should pilots elect to approve the term sheet and voluntarily surrender the pension, the PBGC directors job just got a lot harder. It's possible to lose the pensions in the 1113 process, but voting to end them (accepting the term sheet) makes it a sure thing.

Good luck to all AMR employees, this is not an easy time for any of us. For those living it, it's going to require change. For those who have been through the process, it brings back difficult memories. For those just starting in the career, know that the ceiling just got lower.

Hang tough AMR employees

HalinTexas

Actually, the labor groups get to negotiate terms. This is a company opener. It can't be imposed without judges approval.

The pensions are gone, one way or the other.

Scope is the bigger issue.

This piece is making it's rounds. It's a hatchet job, plain an simple. Little useful information.

HSLD

Yes that's true the term sheet is an opener, but if the pilots agree to a "negotiated settlement" that includes shedding pensions, then they're gone. There's not much the PBGC can do at that point other than go deeper into debt itself when their forced to accept the obligation.

Pensions are on the balance sheets as debt, and that debt will have to be settled before exiting chapter 11. In the UAL BK, the debt was settled at around $.06 on the dollar prior to exit.

The trustee for the AMR pilot pension may have a seat on the creditor committee, the PBGC probably does not and can only exert pressure though back channels. Hopefully between the two, a creative and labor friendly solution can be found.

I agree that the scope battle and the proposed new B scale (Tier I - V) is also a formidable battle.

eaglefly

Yep. To keep the A-fund, they'll have to negotiate to rob peter to pay paul. Monetarily, the other changes to equal that would probably be too great across the board. There's division on the subject with those more junior supporting a termination and those more senior not supporting it.

One theory, is if retained, then those most senior all just bail and take it quickly. Not sure if that then jeopardizes it enough where AMR could then shed it later resulting in a double-loss for those junior remaining. Most, I think want to protect something that can't disappear so easily in the future, especially with this managements serpentine history.

Stickshaker

I'll take any hatchet job that uses part of a nationally broadcast news program to hype pilots and try to shed light on their struggle to maintain a pension:

"...pilots who everyday bear a more awesome responsibility than any other workers in our society. They have in their hands every hour that they're in the air the lives of hundreds of people sitting behind them, and other people on the ground if they somehow cannot bring that plane in for a safe landing..."



"Companies in bankruptcy often try to do things that they don't need to do"

iahflyr

Is AMR the only legacy that still has pensions for pilots?

What

iahflyr

Seems like it is a likely scenario that the pension will be terminated. It may be smart to spend negotiating capital on things that keep AMR industry average (and not below), such as negotiating to keep scope at 70 seats.

Clear Right

Scope is important. Unfortunately the pensions are a thing of the past. As much as pilots like to discuss the decline of the industry with regard to pensions, the reality is welcome to corporate America. All pensions are a thing of the past. Next up will be the loss of municipal and government pensions, and soon the federal government will eliminate pensions as well.

The future across the board will be 401ks and Profit Sharing. I would spend my efforts negotiating a great 401k match and solid profit sharing. It sounds like AMR is offering 15% profit sharing which is pretty darn good. While I hate to see anybody lose their pension unfortunately, welcome to the new norm in corporate America. Not saying it is right, but it is reality. Now, work hard on a great 401k match, at least the company can never touch that, it is your money.