AA: Furloughs? A plan? Retirements?

[CitationLover]

The lump sum's no longer available to retirees? Wow. I hadn't seen that.

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?

 

[spacecadet1]

I heard that the lump sum option will be gone in the next month or two at the current cash burn rate.

 

[spacecadet1]

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.

 

[CitationLover]

I heard that the lump sum option will be gone in the next month or two at the current cash burn rate.

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.

 

[AAflyer]

I heard that the lump sum option will be gone in the next month or two at the current cash burn rate.

No, it has nothing to do with cash burn, last report was that it was funded in the high 90s.

AAflyer

 

[AAflyer]

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.

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

 

[Andy]

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

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.

 

[highflying]

Why on earth are not more senior guys at AA taking there money and running? I would think it would be a no brainer.

 

[waveflyer]

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?

 

[AAflyer]

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.

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