Year's worth of AA pilots retire in one day
 

Airline Biz Blog | Sep 01, 2011

An unusually high number of American airlines pilots retired early as of Sept. 1 -- 111 in all.

As the Allied Pilots Associations points out, 2010's average was 11 per month, with a high of 24 in August 2010. Some other factoids:

* 23 of the retiring pilots are check airmen -- the pilots who make sure other pilots are doing it right.
* 46 of the 111 were Boeing 777 captains, plus another three 777 first officers. About one in every four 777 captain based at D/FW Airport retired.

* The average age, by my calculations, was just under 61. The youngest was a Dallas-based pilot who turned 54 in August. Eight were 63. Less than 20 were under age 60. The bulk fell in the 60 to 62 bracket.

* The average seniority among the retirees, by my calculations, was 29 years. The list included three 777 captains -- one from D/FW, two from Chicago -- with 35 years' experience, and another that would have hit 35 years in October.

As American Airlines pilots know intimately, their B Plan has an interesting feature. A pilot can lock in the value of the B Plan shares backwards for 60 days. If the shares fall sharply, they can retire and still get the shares' value from 60 days before their retirement.

The B Plan shares this summer have dropped a lot, like the entire market, and quite a few pilots decided to take their retirements now rather than hope the B Plan shares recover in value in the near future.

As more than one pilot pointed out to me in the past few weeks, a long-time pilot with a lot of money in the B Plan could have seen the value of those shares drop $200,000 or $300,000 in the past two months. They would have to work a long time just to make up in salary the amount of the decrease in their B Plan accounts.

So why not go now?

That's the B Plan, a defined-contribution plan into which American Airlines contributes an amount equal to 11 percent of a pilot's pay.

Then there's the A Plan, the pilots' defined-benefit plan. There's been a lot of pilot communication back and forth about the possibility of American filing for bankruptcy protection at some point in the future, a step that would likely result in reduced pensions and an inability to withdraw a lump sum upon retirement.

Another reason for pilots to go now rather than wait to see what happens.

Of course, the stock market didn't have a good August, either. There could always be another large group of pilots who decide to retire Oct. 1 if the B Plan shares don't recover from the market's recent dip.

111 American Airlines pilots retire on Sept. 1 : The Airline Zone

That's one heck if a contract provision, cashing out the lump sum using it's value from two months ago.

Just to give an idea, what is the value of the lump sum cashout? Sounds like aa is about to pick up classes at the school house.

Yep, sure is. It may be the last good provision of the contract.

Due to 2 more curious situations, the final number is heard to be 113.

That's awesome! Hope hiring starts soon. Congrats to those that got a bump. :D

Wonder how many will retire tomorrow...

Curious?

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Perhaps the APA should notify these retirees that the PBGC can go back and grab lump sum payments from 3 years before the date of bankruptcy........

Google "4044 Asset Allocation Priority Category 3"

None. AA pilots retire effective the first of the month.