American Airlines says more than 90 percent of its workers with vested pensions would not see reduced benefits even if the Fort Worth-based airline terminates its pension plans.
In a letter sent to employees Monday, American's senior vice president of human resources, Jeff Brundage, attempted to allay workers' fears about the future of their pensions. Since American's parent company, AMR Corp., filed for bankruptcy in November, employees and their labor unions have expressed concern that the airline would jettison its pensions."For those whose pension benefit has vested, if the pension plans are terminated, more than 90 percent of participants would see no reduction in their pension benefit accrued as of the Nov. 29, 2011, Chapter 11 filing date if payments begin at normal retirement age," Brundage wrote. He added that excluding pilots and upper management, only 2 percent of vested workers could see a reduction in pension benefits.However, the company did not disclose what it plans to do with its pension plans, and it has not discussed pensions in bankruptcy court filings. On the day it filed for bankruptcy, the Pension Benefit Guaranty Corp. estimated that AMR's pension plans had about $8.3 billion in assets to cover about $18.5 billion in benefits. The agency, which would assume responsibility for paying pension benefits if American ends the plans, estimated that $1 billion in benefits would be lost.Last week, American made only a $6.5 million pension contribution instead of the $100 million payment that was scheduled. In the question-and-answer section of Monday's letter, Brundage explained that some of the obligations accrued were considered "pre-petition" costs and "must be dealt with under the supervision of the court."The letter also outlined three examples of nonpilot employees and what would happen to their pension benefits. Overall, employees with less than five years of qualified service would lose their benefits if the plans are terminated."Rest assured that whatever happens with our pension plans will happen as part of a comprehensive business plan aimed at making American Airlines a successful and profitable company that can grow and prosper for many years," Brundage said.Separately, American said Monday that it will take a $713 million noncash charge in its fourth-quarter earnings results as it writes down the value of its Boeing 757 fleet."The company concluded the carrying value of Boeing 757 aircraft used in its domestic markets was no longer recoverable," it said in the filing with the Securities and Exchange Commission. "Consequently, the 2011 results will include an impairment charge of $713 million to write these and certain related long-lived assets down to their estimated fair values."As of Sept. 30, American had 124 Boeing 757s with an average age of 17 years.Also on Monday, AMR asked the bankruptcy court to allow it to keep five more planes, all MD-80s manufactured in 1989.Andrea Ahles, 817-390-7631Twitter: @Sky_TalkHave more to add? News tip? Tell us
