Will AA declare bankruptcy?

[Hopeful]

So here we have senior pilots bailing out over an "ANTICIPATED" bankruptcy filing...
So should AA file, what becomes of those pilots who aren't old enough to retire?
How will they fare after a court-abbrogated contracte and SCOPE decimation?

I hope the APA isn't spewing to its members what the TWU is spewing to us...........
Contrary to some of those who believe otherwise, union employees will get a regal hosing in bankruptcy court.

I have coworkers who actually believe their local leadership's claims that the worst we can do in bankruptcy court is the last offer on the table.
How sadly misguided they are.

My suggestion to all parties is to protect and grandfather in ALL current workers and let the company do what they want to do from the new contract date forward.
Some may look at this as selling out future members....But guess what? We were hired with certain promises of job employment. Future employees will have the option of either accepting or rejecting employment with this wonderful company, just as we did.

The only things certain in this life are death and taxes, and oh yes, don't forget, AA executive compensation!

 

[Kev3188]

There is no rational person that would stick w/ a company through bankruptcy and the cuts that are bound to happen if they can get out now.

Hmmm... Guess that made me irrational in '05. LOL.

ALL AA people should be sharpening their pencils and refining a budget that contains cuts in salary and benefits well into the double digits.... 2003 wasn't that long ago and I believe there were stats then that the number or personal bankruptcies in the DFW area soared. Many of those people are still scraping to get by; a 2nd round of cuts could be devastating to a lot of people. Being as prepared as possible is the only course of action at this point.

YES.

And, really, anyone in commercial aviation should have a Plan B, C, D...

 

[Super FLUF]

I hope the APA isn't spewing to its members what the TWU is spewing to us...........Contrary to some of those who believe otherwise, union employees will get a regal hosing in bankruptcy court.

No, they are not. Everyone knows we would get screwed, but the bottom line is THERE IS ABSOLUTELY NOTHING WE CAN DO ABOUT IT. Nobody even cares anymore. This is the company's own fault. They got everything they asked for 8 years ago and they have squandered it through gross mismanagement.

They expect us to just GIVE everything to them? Why would we? We have nothing to gain by just giving away the store. If they are going to eviscerate our contract in BK court then they will have to make their case to the judge.

 

[Hopeful]

No, they are not. Everyone knows we would get screwed, but the bottom line is THERE IS ABSOLUTELY NOTHING WE CAN DO ABOUT IT. Nobody even cares anymore. This is the company's own fault. They got everything they asked for 8 years ago and they have squandered it through gross mismanagement.

They expect us to just GIVE everything to them? Why would we? We have nothing to gain by just giving away the store. If they are going to eviscerate our contract in BK court then they will have to make their case to the judge.

I agree....
Something tells me that all our union leadership have been made aware of what AA would seek in bankruptcy court. They won't admit it. But that's the AA/labor relationship
!

 

[WorldTraveler]

Hmmm... Guess that made me irrational in '05. LOL.




YES.

And, really, anyone in commercial aviation should have a Plan B, C, D...

Note the "IF THEY CAN GET OUT NOW"
That doesn't mean everyone has another plan or that they want to act on it... but when you are close to retirement or on the verge of making a life change anyway, then riding thru bankruptcy is not a good idea.
If potential life changes are still years away, then obviously there is no value in bailing.
.
Obviously most people will choose to stay.
.
Life as a WHOLE is more uncertain that ever... thinking thru all kinds of options is essential for survival.
.
Obviously, unions quit negotiating if they know they are going to get screwed in BK... we have seen that happen before.
There is still a chance that (a) concessionary contract(s) could keep the company out of BK but as in 2003 what was lost will never be recovered. It generally is not worth giving 10 cents today w/ certainty if you MIGHT be forced to give 15 cents later...
the unknown can be horribly paralyzing.

 

[FWAAA]

It's obvious that no poster here knows for certain exactly why each of the 111 AA pilots are retiring effective yesterday, but here's a pretty fair article by Terry Maxon that covers both possible motivations (the B plan lookback and/or the possibility of a bankruptcy filing):

http://aviationblog.dallasnews.com/archives/2011/09/111-american-airlines-pilots-r.html

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.

Bad news is that AA will be temporarily be understaffed, especially on 777s, at least until others are trained and move up.

Good news is that the peak summer travel season is coming to an end and flight cancellations won't be quite as big a deal. Also good that BA can tempoarily pick up some of the slack to/from LHR while others are moved up and complete training.

Each time the equity markets have tanked (think 2008 and other previous stock market crashes), AA's pilot retirements have spiked, primarily because they can look back and lock in the value of the B fund as if the market didn't crash. If a pilot is looking right now at B fund declines of $200k or $300k like the aritcle mentions, now is the time to retire. Look for more on October 1 if the numbers make sense.

 

[eolesen]

Since WT and Fluf are in denial over cause/effect,

Here's an article from 1998. Well before 9/11, and AA was still in the black at the time.

http://www.independent.co.uk/news/american-pilots-retire-early-to-avoid-stock-market-crash-1177030.html

Behind the rash of departures is the pension plan operated by the airline. Benefits for retiring captains are derived from a pooled mutual fund, the value of which has slipped 10 per cent since the start of the market swoon. Shares in American Airlines itself have suffered an even greater 40 per cent slide.

Under contract rules, American pilots have a three-month window during which to make their withdrawals. Thus, benefits taken now are set at prices as they were in July, when the market was still high. For the longest- serving pilots, the pension package owed to them can be worth $3m (pounds 1.84m).

"The money managers are telling us that if you have to retire prior to the end of the first quarter of next year, you've got to go now," Captain Cecil Ewell, American's chief pilot and vice-president, told the Wall Street Journal yesterday. "We've had a lot of guys go out early just because of the market."

OK, Cecil is biased, right?

Here's Lloyd "Super Bowl Holiday" Hill:

http://www.alliedpilots.org/Public/publicrelations/pressreleases/20080125.pdf

According to Hill, the airline doesn’t have enough pilots to cover off-schedule
operations due to severe weather and contingencies such as next month’s spike in the
number of pilot retirements, which he attributed to the recent stock market downturn. Hill
noted that pilots approaching retirement are able to lock in the value of a portion of their
retirement benefit for a 90-day period. Accordingly, February retirees will not be affected
by the decline in equities.

Still a skeptic? Then go look at the B-fund values over on http://www.raa.com/crew_members/cm_fund_tables/bfund.pdf

Fluf asked why they didn't bail out when the fund was at the highest. Looks to me like they rode it most of the way to the top, and bailed out when they saw that it had peaked. It had been in the 60's in March 2009.

Same thing happens with equities. Some ride to the top and are smart enough to get out, others get out after it peaks and falls by 3-5%. I bailed out of AMR after it peaked in 2006. Don't recall the exact price, but it hit in the $40's and I got out in the high 30's.

Here's a third opinion...

http://seekingalpha.com/article/122061-amr-corp-s-pilots-getting-the-short-end-of-the-stick


I don't know how much simpler to put it, especially to someone claiming to be an AA pilot...

To quote one of my favorite TWU slogans, "they got theirs, brother..."

I've given three different sources to back up my view that this is stock market related, and not over a bankruptcy filing.

Terry's blog post referenced above pretty much spells out the same thing. He also acknowledges the A-fund being a possible issue due to lump sum payouts. Beats me.

If Fluf and WT have real proof that a looming bankruptcy is the cause of pilots cashing out, please, go ahead and rebut... If APA still have a lump sum in lieu of defined benefit, then there might be cause for concern as there was with the DL pilots.

 

[Buck]

So here we have senior pilots bailing out over an "ANTICIPATED" bankruptcy filing...
So should AA file, what becomes of those pilots who aren't old enough to retire?
How will they fare after a court-abrogated contract and SCOPE decimation?

I hope the APA isn't spewing to its members what the TWU is spewing to us...........
Contrary to some of those who believe otherwise, union employees will get a regal hosing in bankruptcy court.

I have coworkers who actually believe their local leadership's claims that the worst we can do in bankruptcy court is the last offer on the table.
How sadly misguided they are.

My suggestion to all parties is to protect and grandfather in ALL current workers and let the company do what they want to do from the new contract date forward.
Some may look at this as selling out future members....But guess what? We were hired with certain promises of job employment. Future employees will have the option of either accepting or rejecting employment with this wonderful company, just as we did.

The only things certain in this life are death and taxes, and oh yes, don't forget, AA executive compensation!

My suggestion to all parties is to protect and grandfather in ALL current workers and let the company do what they want to do from the new contract date forward.

It's referred to as the "B-Scale". They did it in 1983 and they can do it again.

 

[Buck]

Since WT and Fluf are in denial over cause/effect,

Here's an article from 1998. Well before 9/11, and AA was still in the black at the time.

http://www.independent.co.uk/news/american-pilots-retire-early-to-avoid-stock-market-crash-1177030.html



OK, Cecil is biased, right?

Here's Lloyd "Super Bowl Holiday" Hill:

http://www.alliedpilots.org/Public/publicrelations/pressreleases/20080125.pdf



Still a skeptic? Then go look at the B-fund values over on http://www.raa.com/crew_members/cm_fund_tables/bfund.pdf

Fluf asked why they didn't bail out when the fund was at the highest. Looks to me like they rode it most of the way to the top, and bailed out when they saw that it had peaked. It had been in the 60's in March 2009.

Same thing happens with equities. Some ride to the top and are smart enough to get out, others get out after it peaks and falls by 3-5%. I bailed out of AMR after it peaked in 2006. Don't recall the exact price, but it hit in the $40's and I got out in the high 30's.

Here's a third opinion...

http://seekingalpha.com/article/122061-amr-corp-s-pilots-getting-the-short-end-of-the-stick


I don't know how much simpler to put it, especially to someone claiming to be an AA pilot...

To quote one of my favorite TWU slogans, "they got theirs, brother..."

I've given three different sources to back up my view that this is stock market related, and not over a bankruptcy filing.

Terry's blog post referenced above pretty much spells out the same thing. He also acknowledges the A-fund being a possible issue due to lump sum payouts. Beats me.

If Fluf and WT have real proof that a looming bankruptcy is the cause of pilots cashing out, please, go ahead and rebut... If APA still have a lump sum in lieu of defined benefit, then there might be cause for concern as there was with the DL pilots.

To quote one of my favorite TWU slogans, "they got theirs, brother..."

Nice shot Eric, however the quote is " I got mine brother" the inference on the "I" Did you not receive a T-shirt when you were taught that slogan?

My favorite was "Will strike if provoked" , maybe there should be a T-shirt with the slogan, "Will file bankruptcy if provoked"

 

[WorldTraveler]

No one is denying that the stock market incentivizes pilots to check out early... but declines in the stock market are not the only reason why AA pilots have been leaving and will continue to leave. You can document one cause 10,000 times but it says nothing about the other 999 reasons.
.
To pretend that AA pilots can't see the handwriting on the wall that everyone here has been talking about for months -if not years - finally coming to an end game is beyond denial.
.
You might also note that even in the article "back then", AA ended up cancelling 1-2% of capacity based on the lack of crews.... and the number that retired then is about half of what just walked out the door Wednesday.
.
There is no denying that AA's revenue generation capabilities will be even further hindered as one in four DFW based 777 captains leaves. And if as expected the number grows in the months ahead the impacts will be even greater
Perhaps you could shed light on which of AA's 777 routes they will be able to downgrade w/ little or no effect on revenue.
.
We have been listening for months that AA wouldn't be following in the same path that other airlines went down... and we are getting with each passing day closer to the same place where other airlines were not that long ago.

They all survived, though. 100% survival rate in BK... the best showing the industry had ever seen in turnarounds.... perhaps why AA leAAders were so convinced they could wait until someone failed.
But also says that those who stick it out will survive on the other side.

 

[will fix for food]

It's referred to as the "B-Scale". They did it in 1983 and they can do it again.

Eagle was AMR's current B scale

 

[Buck]

Eagle was AMR's current B scale

What are you talking about? There was a series of reduced compensation maintenance positions at American Airlines from 1983 forward. The "B-Scale" and "C-Scale" SRP's and OSM's. Maybe this was only at the OH bases. AMR Eagle has nothing to do with it.

 

[Bob Owens]

Absolute rubbish.

The A-fund is the qualifying plan (normal defined benefit). The only risk there is having the defined benefit reduced to $54K per month. Just how much is a normal monthly A-fund payout at age 65 worth? If your union left it at a level that put it at risk during bankruptcy, shame on your union. The whole point of having the A-fund and the B-fund was to protect the qualifying plan and the non-qualifying portion.

$54k /month!!!?? (I thought it was $45k/yr) Well then, us lowly mechanics certainly have nothing to worry about!! I think your numbers are off.

So.... besides the loss in salary (which is still maxing out in the $200K range, no?), purposely reducing their A-fund draws and risking drawing a lower guarantee if the plan is turned over to the PBGC just doesn't make sense to me.

Well they can lock in on their pension here and with the worldwide shortage of pilots pick up work anywhere in the world and possibly get another pension -no? Perhaps management has successfully made this such a miserable place to work that they just dont care, they've had enough and have decided to move on? I've seen that even among us guys that dond have A&B funds.

 

[Bob Owens]

I hope the APA isn't spewing to its members what the TWU is spewing to us...........
Contrary to some of those who believe otherwise, union employees will get a regal hosing in bankruptcy court.

I have coworkers who actually believe their local leadership's claims that the worst we can do in bankruptcy court is the last offer on the table.
How sadly misguided they are.

I dont know of anyone saying that, however if you look at the companys proposal and where we are now its pretty close to what they said they would seek in BK under the Vermont Plan, however now they have 30,000 less employees, 200 less airplanes, bring in around $5 billion more and have around $5 billion in cash. We see where those who went through BK are, their pensions are frozen, had them replaced with 401k matches, AA wants to put all the new guys on the 401K plan, so what do you think will happen to our pension in a few years? The flip side is they have their OT rules, their Holidays, vacation and sick time. Things that pay in the here and now while we gave that stuff up for the pie in the sky should AA exist when we retire.

What I have said is that whether or not they go BK has nothing to do with us. We arent a big enough group and our contract demands arent enough to send this company into BK. Agreeing to concessions under the assumption that should they file anyway, like USAIR did, that the courts would be kinder to us are false. In New York they are starting A&Ps at the third step, starting Title II guys at the fourth step-6 months and they are at top pay, they had to make a special scale for the JFK Boiler Mechanics who earn more than any of us. Where are they going to go as far as wages in BK when they are have to start new people near the top of the scale? We got hosed already. The workforce is never static, people are and always will be leaving. Thats doesnt just go for AA that goes for the entire industry. The number of people coming into this industry continues to shrink. AA is paying huge amounts of OT, if they could get people in at the starting rate the hourly costs, including benifits would be much less than paying all that OT. This isnt 2003, despite high unemployment there isnt a huge supply of mechanics out there. For the pilots the shortage is even more pressing, I recently ran into a laid off AA pilot who was working for World Airways. He said that he had already turned down recall and had no intentions on going back to AA. So the pilots have a real advantage, however their very generous pension plan is what the company has for counter leverage. BK would have a much bigger impact on them than it would us. We may still have our pension in place, but make no mistake your pension has been cut, by inflation. If you cant live off the wage you will not be able to live off that wage based pension either.

 

[Kev3188]

We see where those who went through BK are, their pensions are frozen, had them replaced with 401k matches, AA wants to put all the new guys on the 401K plan, so what do you think will happen to our pension in a few years? The flip side is they have their OT rules, their Holidays, vacation and sick time. Things that pay in the here and now while we gave that stuff up for the pie in the sky should AA exist when we retire.

Not so much...

At NW (ramp and stores) we lost:

Vacation= Lost 1 week
Holidays= Lost 3, and the remaining-if worked- are paid at 2.0x instead of 2.5x
Sick time= First 7 paid at 75%
Pension: Frozen, and replaced going forward w/one run by the IAM
Pay: Anyone hired after the CBA went into effect are on a 10 year scale instead of 5
OT rules: Lost the "short hour" (also known as the easy hour at some carriers)

That's just a few off of the top of my head.

...And that's just for those that we lucky enough to miss the outsourcing axe...