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143 American Airlines pilots retired Thursday
Falling value of stocks cited for the unusually high number
07:24 AM CST on Friday, February 1, 2008
By TERRY MAXON / The Dallas Morning News
American Airlines Inc. said 143 pilots retired Thursday, an unusually high monthly number that the carrier says was caused by the falling stock market, as pilots decided to lock in the value of retirement plans.
In Dallas-Fort Worth, union officials told pilots that 56 of their locally based colleagues had retired.
Anticipating the retirements, the carrier last month canceled 28 flights that it had intended to operate in February, mostly on long-distance international routes that used American's newest and largest airplanes, the Boeing 777.
"Although this represents an unusual number of retirements, it is about on par with what we anticipated," American spokesman Sue Gordon said Thursday. "We made the decision to cancel a limited number of select flights in February. These cancellations represent a small fraction of our February schedule."
She said American has notified customers on the affected flights and is trying to accommodate them on other flights.
"We will continue to monitor the situation and will make further adjustments, if needed," she said.
Pilots' view
The Allied Pilots Association, engaged in contract talks with the airline, has blamed the cancellations on what it calls management's unwise decisions to keep staffing as low as possible.
"As we have been warning for months, AMR management's inept decision-making in manning this airline has brought the current industry pilot shortage to the doorstep of AA," pilots were told in the union's weekly newsletter.
"The signs are all over the February schedule, with advance cancellations of sequences, reductions in city pair frequencies, pleadings for pilots to defer their February vacations, up to 150 projected early retirements estimated for Feb. 1, and creative scheduling and sequence-building to circumvent FAA safety regulations," the union said.
Ms. Gordon said the airline has called on more than 250 management pilots, including those who usually are in the cockpit only to evaluate the performance of regular pilots, to fly trips as needed.
"We feel comfortable that we have sufficient pilots to operate what we have scheduled," she said.
Age changes
In the past, the airline might average 20 to 25 pilots retiring each month as they reached age 60, the federally established age for mandatory retirement.
But Congress raised the limit to age 65 in December, throwing uncertainty into American's planning.
Pilots now can fly another five years, but the decline in the stock market in late 2007 and early 2008 apparently is causing a lot of pilots to take their money and run.
Pilots can lock in the value of their B Plan pension three months in advance of retirement and then choose on their announced retirement date to go ahead and retire or withdraw their notice.
With the stock market falling and at much lower values now than on Oct. 31, many more pilots who put in for retirement three months ago are carrying through with those intentions, the airline said.
The B Plan, whose value fluctuates with the stock market, is handled by financial managers American Beacon Advisors Inc. American Beacon and American are both units of Fort Worth-based AMR Corp.
New proposal
On Thursday, American Airlines officials proposed at the negotiating table that American eliminate the B Plan in favor of the pilots' 401(k). Each pilot's current B Plan balance and the company contribution of 11 percent of a pilot's eligible pay would go into the 401(k) instead.
American spokeswoman Tami McLallen said the pilots would get the same money they get now and could choose to have American Beacon invest the funds, much the same as the investment manager does with their B Plan money, or pick the other investment choices in the 401(k).
Moving to the 401(k) would reduce administrative costs and simplify matters for both the airline and pilots and give pilots more flexibility in managing their retirement money, she said.
But it would eliminate the 90-day window flexibility upon retirement.
An Allied Pilots Association spokesman said the union would review the proposal before commenting.
In addition to the B Plan, American's pilots also participate in the A Plan, a defined-benefit pension.
AMR shares rose 84 cents Thursday to $13.94.
Falling value of stocks cited for the unusually high number
07:24 AM CST on Friday, February 1, 2008
By TERRY MAXON / The Dallas Morning News
American Airlines Inc. said 143 pilots retired Thursday, an unusually high monthly number that the carrier says was caused by the falling stock market, as pilots decided to lock in the value of retirement plans.
In Dallas-Fort Worth, union officials told pilots that 56 of their locally based colleagues had retired.
Anticipating the retirements, the carrier last month canceled 28 flights that it had intended to operate in February, mostly on long-distance international routes that used American's newest and largest airplanes, the Boeing 777.
"Although this represents an unusual number of retirements, it is about on par with what we anticipated," American spokesman Sue Gordon said Thursday. "We made the decision to cancel a limited number of select flights in February. These cancellations represent a small fraction of our February schedule."
She said American has notified customers on the affected flights and is trying to accommodate them on other flights.
"We will continue to monitor the situation and will make further adjustments, if needed," she said.
Pilots' view
The Allied Pilots Association, engaged in contract talks with the airline, has blamed the cancellations on what it calls management's unwise decisions to keep staffing as low as possible.
"As we have been warning for months, AMR management's inept decision-making in manning this airline has brought the current industry pilot shortage to the doorstep of AA," pilots were told in the union's weekly newsletter.
"The signs are all over the February schedule, with advance cancellations of sequences, reductions in city pair frequencies, pleadings for pilots to defer their February vacations, up to 150 projected early retirements estimated for Feb. 1, and creative scheduling and sequence-building to circumvent FAA safety regulations," the union said.
Ms. Gordon said the airline has called on more than 250 management pilots, including those who usually are in the cockpit only to evaluate the performance of regular pilots, to fly trips as needed.
"We feel comfortable that we have sufficient pilots to operate what we have scheduled," she said.
Age changes
In the past, the airline might average 20 to 25 pilots retiring each month as they reached age 60, the federally established age for mandatory retirement.
But Congress raised the limit to age 65 in December, throwing uncertainty into American's planning.
Pilots now can fly another five years, but the decline in the stock market in late 2007 and early 2008 apparently is causing a lot of pilots to take their money and run.
Pilots can lock in the value of their B Plan pension three months in advance of retirement and then choose on their announced retirement date to go ahead and retire or withdraw their notice.
With the stock market falling and at much lower values now than on Oct. 31, many more pilots who put in for retirement three months ago are carrying through with those intentions, the airline said.
The B Plan, whose value fluctuates with the stock market, is handled by financial managers American Beacon Advisors Inc. American Beacon and American are both units of Fort Worth-based AMR Corp.
New proposal
On Thursday, American Airlines officials proposed at the negotiating table that American eliminate the B Plan in favor of the pilots' 401(k). Each pilot's current B Plan balance and the company contribution of 11 percent of a pilot's eligible pay would go into the 401(k) instead.
American spokeswoman Tami McLallen said the pilots would get the same money they get now and could choose to have American Beacon invest the funds, much the same as the investment manager does with their B Plan money, or pick the other investment choices in the 401(k).
Moving to the 401(k) would reduce administrative costs and simplify matters for both the airline and pilots and give pilots more flexibility in managing their retirement money, she said.
But it would eliminate the 90-day window flexibility upon retirement.
An Allied Pilots Association spokesman said the union would review the proposal before commenting.
In addition to the B Plan, American's pilots also participate in the A Plan, a defined-benefit pension.
AMR shares rose 84 cents Thursday to $13.94.
