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AA: Furloughs? A plan? Retirements?

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stlflyguy

stlflyguy

UL Listed
Joined
Sep 21, 2003
Posts
312
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
 

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