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AA: Furloughs? A plan? Retirements?

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stlflyguy

stlflyguy

UL Listed
Joined
Sep 21, 2003
Posts
311
The last week or so has revealed that AA may furlough in the near future.

Also revealed was that the A-Plan will be less than 80% funded, prohibiting lump sum distributions to retirees. It'd take more money than the company wants to spend (+$1 bil?) to keep the level above 80%.

I'm still out on furlough, though thankful that I wasn't caught in the middle between two jobs.

Any information from those "on the property?"

Thanks.

stlflyguy
 
I think all the hubbub isd half posturing (contract nego) and half truth. Let them cut the damn A-plan, we certainly don't need the extra weight. Go the way of the TWA DAP program, let us ALL make money and move on. If you are relying on a pension in the airline industry, you have some serious issues to deal with. Give me my 401K and leave me alone!

I don't think they'll furlough, as the June 4th class has yet to be cancelled and those boys and girls will receive at least 5 months severance come furlough. Not the best utilization of resources in my book. If AMR scrubs this up, I'll take my ten years and walk for good!
 
I think Magrs' info is WAY off.

There will certainly be furloughs. It's almost a given that the next class will be canx'd and then some more furloughs after that. The execs are earning their big bonuses by making these "hard" decisions. This serves several purposes, including calling APA's bluff.

As far as retirements go, I can't wait until Arpey even hints at Chapter 11, just to watch hundreds, if not a thousand Captains drop retirement papers like "right-now." For that reason, I expect the words from management to be conciliatory until the BK bomb is dropped one Sunday morning. If you get snookered like this, you're stupid.

Contracturally, unless Arpey takes the company to BK, there's little he can do about the pension and almost NO ONE would allow the A and B funds to be stolen.

If you're a current AA furloughee, don't quit your job and don't wait around for a recall to AA. It's not remotely the same company you left years ago.
 
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Not sure where the 5 month severence check comes from... 5 years = 2 mos furlough pay... from the school house, furloughs are a "distinct possibility" in fact, the last and final recall class: in June, the guys are actually being given a choice on whether to change their mind... time will tell.
 
So, why run the class if you are going to furlough guys with 12 years?

5 1/2 mos full-pay I think?

Unless they cancle tonight, they will NOT be cancelling a class which starts in three days.

Draginass, get your facts correct. June 4th class is still on, and to bring those guys on to furlough in two months makes zero sense. Too many training events followed by furlough pay. If the class is not cancelled in the next 48 hours, there will be NO furloughs!
 
Just wondering what the payout for a guy with 25-30+ years is?
I know a guy that just retired at age 60 and said he got $2 million. Does this sound accurate for a 25-30 year guy?

737
 
aa73 said:
That's about right.

73
Click to expand...

Thanks aa. Not bad, I had origionally thought it might be high! I guess it still remains the same tha the senior guys make out like bandits leaving the junior guys with nothing!

737
 
Andy said:
The lump sum's no longer available to retirees? Wow. I hadn't seen that.
Click to expand...

the 80% funding requirement for lump sum distributions is FEDERAL LAW (Pension Protection Act of 2006).


here is the math for a 30yr AA DB plan payout (using the pay and pension info on airlinepilotcentral.com).

1.25% x FAP x 30 = 37.5% of FAP

at age 60 an appropriate life annuity is about 11.5 (age 65 about 10). so the lump sum will be:

37.5% x FAP x 11.5 = 431.25% of FAP.

if FAP is close to current MD80 CA pay then the LS payout will be about:

431.25% x $161,000 = $694,312.50

at 777 CA pay then its:

431.25% x $205,000 (the current 401(a)(17) comp limit is $230,0000) = $884,062.50


the $2 million dollar figure is either adding in the B plan payout or they worked longer than 30 years. even at 40 years worked the above numbers simply need to be increased by 33% which is still nowhere close to $2 million.

what is the plan definition of AA's lump sum factor?
 
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Also if a bunch of guys punch out early, then the B-fund unit value will collapse leaving the people still on the property with nothing. Pretty scary.
 
spacecadet1 said:
I heard that the lump sum option will be gone in the next month or two at the current cash burn rate.
Click to expand...

negative. the 80% comes from the annual pension valuation which must be done by 4/1 of each year. if the 1/1/2008 val numbers done by 4/1 show above 80%, then its above 80 until the 1/1/2009 val says it isn't.
 
spacecadet1 said:
Also if a bunch of guys punch out early, then the B-fund unit value will collapse leaving the people still on the property with nothing. Pretty scary.
Click to expand...

Uhhhhh no again,

Guys "punching" out have nothing to do with the B fund "VALUE", that is dependent upon the market and where the money is invested. The B value just rose again recently.


So to review, The lump sum is still an option, and they have not announced any furloughs. IN light of current manning, up coming 737 deliveries, and potential retirements many do not think they will furlough.

Could they, sure. If oil hits $200 you can be "guaranteed" this entire industry will collapse!

WIshing the best for all of us.

AAflyer
 
AAflyer said:
So to review, The lump sum is still an option, and they have not announced any furloughs. IN light of current manning, up coming 737 deliveries, and potential retirements many do not think they will furlough.

Could they, sure. If oil hits $200 you can be "guaranteed" this entire industry will collapse!

AAflyer
Click to expand...

About the only airline that won't be furloughing is Southwest. Until those planes are on the ramp, I wouldn't count on them - even then, you could easily be parking more aircraft than are being delivered.
Oil prices will become less relevent as the economy continues to tank. This industry will look completely different by 2010.
 
that was my question too-- anyone in contact w/ a 777 captain that didn't choose the retirement option earlier this year? What is their logic?
 
Andy said:
About the only airline that won't be furloughing is Southwest. Until those planes are on the ramp, I wouldn't count on them - even then, you could easily be parking more aircraft than are being delivered.
Oil prices will become less relevent as the economy continues to tank. This industry will look completely different by 2010.
Click to expand...

I do not count on anything Andy, however merely showing what the "current" situation is and how it relates to furloughs here.

I have mentioned before we need to replace the S80, and fuel cost savings alone almost covers the lease.

Yes, the planes could easily easily be replaced while parking more S80s.

UAL could be out of business this time next year. Like I said Andy, merely throwing out what is currently being looked at. Plans can change almost daily in this environment.

In case you missed it the first time, I wish us all well, we are going to need a serious miracle soon.

AAflyer
 
highflying said:
Why on earth are not more senior guys at AA taking there money and running? I would think it would be a no brainer.
Click to expand...

Because until BK is imminent why punch out? The B fund unit value just moved north again.

Many of these pilots are re-evaluating monthly what to do. You can be certain if things get worse and BK is imminent you are going to see anywhere from 1500-2000 guys bail out overnight like DAL had a few years back.


IMHO

AAflyer
 
The industry is not in that bad of shape. We are making tons of money!!!! We are just using more than we make!
 
AAflyer said:
UAL could be out of business this time next year.
Click to expand...

... and I could hit the Powerball jackpot.
That wasn't the subject at hand, but if it makes you feel better to throw that one on the table, have at it.

I wish that I could have a buck for every post since 911 that had UAL going out of business in (fill in the blank) months. You guys remind me of the 'Bring out your dead' scene from Monty Python and the Holy Grail.
http://www.youtube.com/watch?v=grbSQ6O6kbs
 
SFR said:
The industry is not in that bad of shape. We are making tons of money!!!! We are just using more than we make!
Click to expand...

:p
You sound just like Lawrence Yun from the NAR. :D
You too could have a bright future in the PR world. Have you considered applying to the Baghdad Bob School of Spin?
Morals and ethics are disqualifying handicaps; get rid of them before considering a career in the business.


Edit: For those not familiar with Lawrence Yun, here's a recent article: http://www.realtor.org/research/reinsights/forecast
Recent home sales: http://www.realtor.org/wps/wcm/connect/8252378049d4dfd4a1a4e10ae92e22c9/EHS052308.pdf?MOD=AJPERES&CACHEID=8252378049d4dfd4a1a4e10ae92e22c9
 
Last edited:
SFR said:
The industry is not in that bad of shape. We are making tons of money!!!! We are just using more than we make!
Click to expand...

is that patrick ewings take on the airline industry?
 
Andy said:
... and I could hit the Powerball jackpot.
That wasn't the subject at hand, but if it makes you feel better to throw that one on the table, have at it.

I wish that I could have a buck for every post since 911 that had UAL going out of business in (fill in the blank) months. You guys remind me of the 'Bring out your dead' scene from Monty Python and the Holy Grail.
http://www.youtube.com/watch?v=grbSQ6O6kbs
Click to expand...

You missed it completely.... I take your comments about picking up 737s about as much as you listen to all the idiots on here with UAL doom and gloom.

In other words what happens, happens.

I merely pointed out current manning and what the current game plan is..

Of course things are subject to change So is everything in this world. Do you get that?

Sticking by my former posts,

AAflyer

P.S. Andy, you for the most part have had very professional and factual posts, not sure where the attitude is coming from? However if we park the 80s and take no 737s, you can tell me "I told you so":)
 
AAflyer said:
P.S. Andy, you for the most part have had very professional and factual posts, not sure where the attitude is coming from? However if we park the 80s and take no 737s, you can tell me "I told you so":)
Click to expand...

What's the delivery dates on the 73s? There comes a certain point where you can't turn them off without a huge penalty.
I'm pretty sure that your first deliveries are early 2009, so I doubt that you'd see the first ones turned off. As to the ratio of 80s parked vs 73s delivered, that's another matter.

As for AMR furloughing, if there's a mass exodus for the door ala Delta, that would obviously help alleviate furloughs.
 
I understand they MAY take delivery of three (3) 73's a month starting in Jan 09. Total for 2009 may be 34 and perhaps( a very big perhaps of 36 in 2010), unfortunately replacing the aging S80 fleet on a 2 73 for every one S80 rate.
Like others have posted, they feel that even with a lease rate the 73's are a better deal with the price of oil north of $100 a barrell.

IMO, they will furlough starting in the mid to late fall, just how deep they go this round is anybody's guess.

I am one that may get furloughed so this is not good news at all.


Best of Luck to everyone.
Cheers
 
Apparently, during yesterdays 04 Jun recall class they announced that they DO NOT plan to defer any of the oncoming 73's. So if that is the case then AA should begin accepting new 73's at a rate of 3 per month starting in Jan 08.
The big questions still remain:
1) retirement #'s
2) MLOA returnees
3) Quickness of the Bus and S80 reductions
4) the big concern being
the price of oil.

So with that in mind it should be an interesting ride over the next few months.

The information that I have been given is that they may start the flying schedule reduction in early Sep.

How long that goes on for and how many pilot's are going to be affected, only time will tell.

Best of luck

JP what say you?
 

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