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AMR Corporation Message Board

  • formerbaggy formerbaggy Nov 17, 2011 3:59 PM Flag

    rogerjames55346 you are an idiot to post AMR BK


    If you heard the analyst report on CNBC within the past 15 minutes, yes there is a probability of that. 50 - 60% probability with the disclaimer that no filing prior to Dec 2012. Anyone with half a brain should understand the real message. AMR management has plenty of time to turn this around and more than enough time for the pilots to approve an acceptable deal for all parties.

    The pilots with shares by way of profit sharing can lose their entire retirement dollars held in AMR shares by holding out for their so-called/at-the-moment final offer. The games people play have put AMR shares to an unsustainable low in the near term.

    Believe it. The future will reveal the truth I am posting. Watch.

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    • The B fund is legally not at risk from a bankruptcy. AMR can't touch it. The only thing that drains it is pilots retiring normally, but there is a lot of money there. In Chapter 11, AMR can ask the judge for anything and they may say they can't keep contributing 11%, but they will contribute something. The companies that went Chapter 11 and came out are putting a lot of money in pilot retirement plans. AMRs comprehensive contract proposal wants to transition any new pilots to a defined contribution rather than defined benefit plan. Any existing pilot can keep what is in place now or transition to a new 16% of pay proposal. It would be less than the current A fund and 11% B fund, and I think it may possibly not have PBGC protection, though I am not sure about that. There are a lot of factors in play here- it is not just a simple jingo-driven solution. For example, a few years ago the US government changed the interest rate that all of the retirement programs had to use for calculations. Instantly, many plans that were 80% funded became 120% funded or more. The result, as intended, was that many of these companies put 0 or very little in their plans for a couple of years. It is like a ticking time bomb, brought to you by your (AGAIN!) underperforming Senators and Congressmen. The amount due goes up and someone will eventually lose or have to pay. In the AMR yearly report which came out at the end of April 2011, it shows that AMR did not put one penny into the pilot A plan in 2010, though they did put some in a few of the other employee groups' plans. This dropped the pilot funding down to 88%, further angering the pilots. Working at the same pay rates as 1993 and AMR won't even put any money in the A fund the entire year.

    • Is the amount the pilots get in the B plan at risk in BK?

      I certainly don't have all the facts, but I know many say that the pilots are leaving for the financial benefit. I was just trying to figure that out.

    • Pilots sign in for trips an hour before takeoff time. However, the hourly pay does not start until a wheel turns, so if there is a 3 hour delay to start, they have been at work 4 hours and not earned a cent. Once at the destination, at American the pilots earn 1.80 per hour in per diem until it is time to sign in for the next day. There are a few things built into some pilot contracts to force the company to use pilots efficiently, called "duty rigs". One of these would be an "average day." For example, an average day of 5 hours means that on a 2 day trip the trip must pay at least 10 hours. That way they don't use you for only an hour each day and you get only 2 hours pay for two days gone. One thing that American complains about is that their pilot utilization per day is less than some other carriers. But, American makes the schedules- it is their fault. Southwest may schedule someone for 20-23 hours in a 3 day trip, but American may only get 15-18. Another reason pilots like flying for Southwest- more work on the days away from home, less days away from the family.

    • Sorry, I had to break for dinner. I don't know what the numbers on the annuity are. Have never known anyone who took it. Pilots can take an annuity or lump sum, but they do not trust that the money will be there for years if they take an annuity.

    • Whatever is happening! Don't book your tickets with AMR!

    • Do they have a choice for an annuity or the lump sum? Most if not all defined benefit plans state a percent of final average earnings, and then some also add the option for a lump sum.

      Or, is it, you don't want to say? Which is fine. I can estimate it from the lump sum.

    • Well, the average 777 Captain after 30 years gets something like 800k, as an A fund lump sum. If he has been there less, or is not 60 yet and has a penalty, it might be 600k. If he flies a smaller airplane or flies less than max, his final average earnings will be less and his A fund will be less. Some of the FOs retiring are getting 200-300k if they are 60. If you are a 777 Captain at American, you make about 205 per hour, which is what the Southwest 737 guys make. The most anyone can fly is 1000 hours per year due to FAA regs, so a 777 AA Captain can make a little over 200k a year and may get 800 k in the A fund if he is 60 or over and has been there 30 years or more. Hope that helps.

    • Is it 30%, 50%, 60%, or x% of final average earnings? What percent of final average earnings is the A fund benefit?

    • I'll be watching....was surprised that AMR is kicking the negotiations with the Mechanic's union back into mid-December. I guess if they can't square things with the pilots, what's the point in even talking with those grease monkeys.

      • 1 Reply to rogerjames55346
      • Theres a new wrinkle and its the pilot retirement lump sum look back. September and October 1 had several hundred pilots (total) leave the company for voluntary retirement so they could capture the 60 day lookback on shareprice for AMR and still get a lump sum distribution.

        APA will not be negotiating with the company until the 27th of November now. Just whatiffin' here but if a significant number of pilots put in for retirement December 1 fearing a BK filing it could be the dealbreaker. AMR wouldn't want to be in the position of borrowing money to pay for pilot retirement that will leave them short of pilots for the holidays.

        Better to just file and put a stop to the retirements November 25th.

    • The pilot retirement funds are 0% in AMR stock. If any one individual pilot owns AMR stock and Chapter 11 is declared, those holdings will be valued at less than 1.00 per share like for anyone else. The pilot A fund is based on a formula that takes the high 60 months and multiplies it by years of service and a couple of other things. This A fund would be assumed by the PBGC, so pilots with less service would get around 2500 per month and those that had been here the longest would get over 4000 per month. The senior guys would lose the most as they do not have time to recover. The pilot B fund is based on 11% of earnings and grows for each pilot every year. That money can't be touched by AMR or anyone else- it has already been put aside and is invested in everything just like a mutual fund. The A fund is a fixed benefit right now and AMR is trying to get it changed to a fixed contribution instead. The carriers that went bankrupt, even though there was initial pain and their A fund went to the PBGC, have come out of it and the pilots are getting new money set aside for their retirement. So it would happen at American. So anyone saying "OMG, you must sign or you will lose all of your retirement" is either a chicken little, a shorter, or AMR management. Now that you have been educated, if you keep saying "OMG you will lose your retirement", it will help identify who you are.