Merger under reconsideration?
10-10-2008, 06:02 PM
#12
Line Holder
Joined APC: Jan 2006
Posts: 99
It is a possibility that NWA could flie BK again to "dump" any pensions remaining. A fire sale for DAL and another chance at union busting. Right sizes the fleet.
If I were NWA pilots, I'd get to an agreement before the banks open Tuesday morning. There is no contract until signatures happen. Too bad the NW MEC are infighting. They are wasting valuable time and is putting the entire NWA pilot group at risk.
Of course the CEO's will still get the golden parachute, so it makes no difference to them how long it takes.
JMHO
If I were NWA pilots, I'd get to an agreement before the banks open Tuesday morning. There is no contract until signatures happen. Too bad the NW MEC are infighting. They are wasting valuable time and is putting the entire NWA pilot group at risk.
Of course the CEO's will still get the golden parachute, so it makes no difference to them how long it takes.
JMHO
10-10-2008, 06:31 PM
#13
Can't abide NAI
Joined APC: Jun 2007
Position: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
Posts: 11,990
Originally Posted by Holly Hegemon, Plane Business Banter
Food For Thought: Airlines and Pensions
I had an errant thought yesterday as I watched the Dow fall and not get back up again.
And that thought concerned pensions. And the airlines that still have pension plans for their employees.
Remember that the last time the airline industry had to deal with the "pension issue" was following the market meltdown that followed the "internet bubble" that burst in 2000.
(If you note a bit of sarcasm in that description...good.)
Going into 2001 and 2002, airlines were suddenly looking at pension plans that required more and more in cash infusions -- because the value of the underlying securities in the pension funds had declined so precipitously.
Rewind the clock. Start it over again.
We are now looking at exactly the same situation. With equities in a free-fall -- all pension funds are gasping for air.
Tuesday, Congress' top budget analyst estimated that Americans' retirement plans have lost as much as $2 trillion in the past 15 months. And you can add more to that total, because you can bet his number crunching did not take into consideration the free fall in the market during the last two weeks.
Public and private pension funds and employees' private retirement savings accounts - like 401(k)'s - have lost some 20% overall since mid-2007, said Peter Orszag, the head of the Congressional Budget Office.
So just a little red flag for the radar screen.
Airlines such as American Airlines and Continental Airlines that have worked hard to keep their employee pension plans in place are going to face tough times ahead -- as pension plan funding requirements balloon.
Then again, an airline like United, which was successful in blowing up its employee pension plans as part of their bankruptcy proceedings, won't have to worry.
Something just doesn't seem right about all this, does it?
Posted by Holly at 1:06 PM |
I had an errant thought yesterday as I watched the Dow fall and not get back up again.
And that thought concerned pensions. And the airlines that still have pension plans for their employees.
Remember that the last time the airline industry had to deal with the "pension issue" was following the market meltdown that followed the "internet bubble" that burst in 2000.
(If you note a bit of sarcasm in that description...good.)
Going into 2001 and 2002, airlines were suddenly looking at pension plans that required more and more in cash infusions -- because the value of the underlying securities in the pension funds had declined so precipitously.
Rewind the clock. Start it over again.
We are now looking at exactly the same situation. With equities in a free-fall -- all pension funds are gasping for air.
Tuesday, Congress' top budget analyst estimated that Americans' retirement plans have lost as much as $2 trillion in the past 15 months. And you can add more to that total, because you can bet his number crunching did not take into consideration the free fall in the market during the last two weeks.
Public and private pension funds and employees' private retirement savings accounts - like 401(k)'s - have lost some 20% overall since mid-2007, said Peter Orszag, the head of the Congressional Budget Office.
So just a little red flag for the radar screen.
Airlines such as American Airlines and Continental Airlines that have worked hard to keep their employee pension plans in place are going to face tough times ahead -- as pension plan funding requirements balloon.
Then again, an airline like United, which was successful in blowing up its employee pension plans as part of their bankruptcy proceedings, won't have to worry.
Something just doesn't seem right about all this, does it?
Posted by Holly at 1:06 PM |
Holly Hegemon's comments a week ago. I'm down around another 20% this week alone. I'd like to see the numbers on NWA's unfunded liabilities.
10-10-2008, 09:14 PM
#15
Back on TDY
Joined APC: Apr 2008
Position: 747-400 Captain
Posts: 12,487
Originally Posted by sailingfun
I am sure you are kidding in this post. Read your own 10Q reports. The pensions were underfunded by billions before the market meltdown.
Carl
10-11-2008, 03:05 AM
#16
Gets Weekends Off
Thread Starter
Joined APC: Feb 2008
Posts: 19,273
Carl, I should have said annual report. It was put out that the pilot fund at NWA was underfunded by 1.8 billion. That compares with the Delta pilot fund underfunded by about 3.2 billion at termination. There were around 1.8 billion in assets and approx. 5 billion in liabilites. To suggest the NWA pension fund is in good shape is a bit strange. Your MEC agreed to a hard freeze on the plan yet there were no real funding issues? NWA management agreed to all the restrictions in the pension relief bill yet they had no real problems?? DALPA put out many times that the ongoing funding requirements by Delta for the NWA frozen pilot plan only were 20 to 30 million a year assumming a reasonable investment performance. They said with a poor performance that number could ballon to over 100 million a year. What is the number now that we have had a meltdown? I can assure you that its not pretty unless your pension plan was all in cash which is unlikely.
10-11-2008, 04:51 AM
#18
Works Every Weekend
Joined APC: Dec 2007
Position: 737 ATL
Posts: 3,506
Originally Posted by acl65pilot
It is not good, but a deal breaker? I do not know. There are other legal issues at play here with DAL bailing on this.
Alternatively, they could do a pre-packaged "briefcase bankruptcy" prior to DCC. Just NWA and the PBGC. No other creditors. Quick and dirty. Problem is, the PBGC would want a big chunk of the NWA equity in return.
10-11-2008, 06:10 AM
#19
Line Holder
Joined APC: Apr 2008
Posts: 57
Originally Posted by Check Essential
I'm sure there's a break-up fee. Peanuts compared to inheriting those pensions.
Alternatively, they could do a pre-packaged "briefcase bankruptcy" prior to DCC. Just NWA and the PBGC. No other creditors. Quick and dirty. Problem is, the PBGC would want a big chunk of the NWA equity in return.
Alternatively, they could do a pre-packaged "briefcase bankruptcy" prior to DCC. Just NWA and the PBGC. No other creditors. Quick and dirty. Problem is, the PBGC would want a big chunk of the NWA equity in return.
The "Break up" fee is 250 million, if I remember correctly. However, it's hard to believe that at this phase of the process Delta Management would pull out now.
10-11-2008, 07:18 AM
#20
Happy to be here
Joined APC: Jun 2006
Position: A-320A
Posts: 18,563
Well actually it is not that they would pull out, they would just have a ch 11 filing before DCC.
Funny thing is that after a few discussions, this fits with a quick CH 11 filing and then DCC on Q1 of '09.
Read, change in AE, and what it I will accomplish.
Funny thing is that after a few discussions, this fits with a quick CH 11 filing and then DCC on Q1 of '09.
Read, change in AE, and what it I will accomplish.
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