xdlx
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 12:28 pm

Given the current financial situation, and the fact that things at AA are still running in the same direction.
How many pilots will AA lose this month?

Anyone knows? How much advance notice do they need to provide to the company to exercise those rights?
 
Curiousflyer
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 1:33 pm

I wluld be surprised if AA lost any pilots or FAs, or very small numbers, given the protection they get through their unions/contracts and the fact that pay is pbasedon seniority, there is little incentive to get a new job unless they expect the company to fold.

As it is likely that AA will simply bankrupt under Chapter 11 and re-organize, they probably expect their contracts to be re-negotiated and to lose some advantages, and know what to expect having seen similar situations recently at AC, DL, NW, US and UA, but they will still be before off than if they started at the bottom of the seniority list with another airline. Also, in case that AA does not go bankrupt, its shareholders might prefer, they may simply re-capitalize but I would still expect some contract review before this happens.
 
flymia
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 4:46 pm

Quoting xdlx (Thread starter):
Given the current financial situation, and the fact that things at AA are still running in the same direction.
How many pilots will AA lose this month?

This has nothing to do with AA and only to do with the stock market. AA retirment plans are in the market but no stocks are AMR stock. Pilots have the choice of taking a retirement planned locked in from prices 60 days earlier. That is why pilots left it has nothing to do with how the airline is running.

Quoting CuriousFlyer (Reply 1):
I wluld be surprised if AA lost any pilots or FAs, or very small numbers, given the protection they get through their unions/contracts and the fact that pay is pbasedon seniority, there is little incentive to get a new job unless they expect the company to fold.

See above
Senior pilots leaving is really not a bad thing. There are many many pilots out there and many very qualified pilots who do not have jobs and of course many Eagle guys who will flow through. They will need to start some more training etc.. But junior pilots make less money so really it is probably a good thing for AA that senior guys are leaving. AA has not hired a new pilot in years. I think their youngest pilot came on in 2001 one or something like that. There are plenty of very qualified senior first officers at AA, and captains and eagle who will take these spots up. They just need to prepare ahead of time.

As for notice I think 30days?
"It was just four of us on the flight deck, trying to do our job" (Captain Al Haynes)
 
ripcordd
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 4:51 pm

I have heard around 200 will leave in Oct....A Big reason in the reduction in flying along with the reg fall cuts..
 
apodino
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 4:55 pm

Quoting CuriousFlyer (Reply 1):
I wluld be surprised if AA lost any pilots or FAs, or very small numbers, given the protection they get through their unions/contracts and the fact that pay is pbasedon seniority, there is little incentive to get a new job unless they expect the company to fold.

You are looking at this in the wrong way. The issue is not about pilots leaving for another carrier, the issue is do the pilots want to retire now, or wait. AA has a very senior workforce, especially among the pilots, and with the Stock Market tanking the way it has, many pilots are trying to lock in the retirement benefits before these shrink with the stock market. With the rumblings of Chapter 11 possibilities circling on wall street, this is only going to drive more guys to jump off the ship and lock in their retirements before the retirement benefits are dumped in Bankruptcy the way UAs was. AA is going to have a lot of openings real soon because of this in my opinion. This will help them a lot on labor costs.
 
xdlx
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 5:13 pm

Quoting apodino (Reply 4):

Thanks, For a moment I thought no one understood the question?

According to how I understand it; as AA pilots "retire" the Flow Thru program is now protecting
the back fill. During the recent AA/Eagle Spinoff it is apparent AA will absorb the Eagle "most SENIOR"
( Some 20+ yrs ) pilots into the mainline.

The reason for the question brings up the Training Capacity at AA, I know personally one of the
first in the Flow Thru program. He went to intial for the Super80 and flew 6 weeks on the line before
eligible for the 738 initial.
What is the capacity of the Flight Trainning department at AA to replace the atrition, 100? 150? @ month?
Can the training cycle keep up with the atrition?
 
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CV880
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 5:30 pm

Quoting ripcordd (Reply 3):
I have heard around 200 will leave in Oct.

Which was what happened on a monthly basis right before DL declared BK. DL could not afford the lump sum payouts($200-$300Mil/per month) which were due when pilots retired, so the defined pension benefit went to the PBGC in BK.
 
Curiousflyer
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 5:50 pm

Quoting apodino (Reply 4):
You are looking at this in the wrong way. The issue is not about pilots leaving for another carrier, the issue is do the pilots want to retire now, or wait.

OK thanks I got it now.

Quoting xdlx (Reply 5):
Thanks, For a moment I thought no one understood the question?

Maybe you could clarify the title and add "due to retirement", it is not clear otherwise and the question seemed really odd.
 
ripcordd
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How Many Pilots Will AA Lose This Month?

Fri Sep 23, 2011 6:32 pm

also a lot of the eagle pilots are not making it thru training on the S80 and they are washing back to eagle. So if this is a scare tatic this is working on getting people to retire and then they have the whole winter to train new pilots and get the flying levels back up again.
 
stillageek
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RE: How Many Pilots Will AA Lose This Month?

Sat Sep 24, 2011 12:13 am

Quoting ripcordd (Reply 8):

You are horribly misinformed. Eagle pilots who go to AA and fail training are NOT able to flow back to Eagle. Have Eagle pilots (all very senior CA's with 20+ years seniority at Eagle) had problems on the 80? Yes. They all went from flying modern equipment (ERJ/CRJ) to flying an older era plane. Additionally they were the first new hires at AA in 10+ years. The training department wasn't quite up to speed on training new hires.

AA pilots are retiring because they want to take their money and run.
 
AAR90
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RE: How Many Pilots Will AA Lose This Month?

Sat Sep 24, 2011 1:04 am

Quoting xdlx (Thread starter):
Given the current financial situation, and the fact that things at AA are still running in the same direction.

If by "current financial situation" you mean the general stock market, then yes, the current stock market situation is causing a higher rate of retirements than normal at AA. If you mean AA's current financial situation, then you would be mostly incorrect.

Quoting xdlx (Thread starter):
How many pilots will AA lose this month?

Unknown (publicly). AA management makes an estimate based upon the number of pilots who maintain the "lock-in" option and a lot of historical analysis.

Quoting xdlx (Thread starter):
How much advance notice do they need to provide to the company to exercise those rights?

Minimum notice is... one day. By the end-of-business on last day of each contract month any pilot that has an active lock-in option must either: (a) re-new, (b) revoke, or (c) retire. If retirement is selected, the effective retirement date is the first day of the next contract month.
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xdlx
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RE: How Many Pilots Will AA Lose This Month?

Sat Sep 24, 2011 1:13 am

Quoting AAR90 (Reply 10):

Yes... current ECONOMIC situation!

I can not comment on the efficiencies or lack thereoff in the "Academy", and I was just trying to establish
the CAPACITY of the TRAINING department to ADJUST to todays realities.
Obviously like AA itself they are reacting NOT PROACTIVE!
 
Archer
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RE: How Many Pilots Will AA Lose This Month?

Sat Sep 24, 2011 8:36 am

I've heard CO is planning on a lot of retirements soon as those who were extended by the age 65 rule
are now nearing that age.
Not sure how many per month my friend said but it's a lot of training in the next several years.
 
xdlx
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RE: How Many Pilots Will AA Lose This Month?

Sat Sep 24, 2011 12:53 pm

Quoting Archer (Reply 12):

Well .... all airlines have been waiting on this, the reprieve they received when FAA "extended" the retirement
age to 65.
But the same FAA now may dictate you need more rest 9h instead of 8h min of rest between work periods.
The industry is still confused as if this new requirement will cause additional needs for crewmembers, or parking
airplanes and laying people off as the ATA position reveals.

Can AA, DL, CO/UA with their sizebale operations endure a training cycle without affecting their current operations?
 
mcg
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RE: How Many Pilots Will AA Lose This Month?

Sun Sep 25, 2011 4:00 am

Why does AMR's stock price or financial condition influence pilot retirement behavior?
 
AAR90
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RE: How Many Pilots Will AA Lose This Month?

Sun Sep 25, 2011 4:35 pm

Quoting mcg (Reply 14):
Why does AMR's stock price or financial condition influence pilot retirement behavior?

Very little. That is a myth that far too many folks continue to espouse. AA pilot retirement plans are prohibited from investing in AMR, any airline or any airline primary supplier.
*NO CARRIER* -- A Naval Aviator's worst nightmare!
 
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Acey559
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RE: How Many Pilots Will AA Lose This Month?

Sun Sep 25, 2011 11:45 pm

I received an email from the Eagle MEC and it said they have (or are in the process of) negotiating about 825 flow through positions. That's going to leave quite the vacancy here at Eagle if all of those pilots choose to jump ship and go to AA.
 
cf6ppe
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 2:13 am

here is a link to last months thread on this subject...

111 AA Pilots Retired Today (by flyhossd Sep 1 2011 in Civil Aviation)
 
CX Flyboy
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 2:24 am

I must admit to not knowing many of the details about how the retirement plans work in US airlines but it does not sound great to me. How you can see your retirement fund wiped out if the airline cannot afford it or moves it around. That would never be allowed over here. At CX every month they pay their contribution to your retirement into a separate account held and managed by a brokerage firm or bank (HSBC at the moment). That money is yours to invest as you see fit. if you leave the airline, you are entitled to walk away with that money (Since it is yours). Of course the stock market condition affects how much you make and lose on that money but instead of investing it into funds, you can keep it as pure cash. The point is that the airline has already paid it out. They no longer have anything to do with that cash once it gets paid every month and you do not get stories of pilots getting screwed when the airline runs low on cash and decides to wipe out retirement funds. How the government over there can allow this to happen is mind boggling to me. There are laws regarding things like this over here.
 
Flighty
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 2:47 am

The only way to "lock in" their retirements AFAIK is a cash-out option. In a bankruptcy scenario, pensions are not necessarily secure, even if the pilot has punched out. The pension exists so long as the company is in a position to pay it out of continuing cash flow. Which is never a sure thing. Upon a default, the pension would go to PBGC. Leaving active duty would not save you. That is, unless you took a lump sum out.

Quoting CX Flyboy (Reply 18):
They no longer have anything to do with that cash once it gets paid every month and you do not get stories of pilots getting screwed when the airline runs low on cash and decides to wipe out retirement funds.

You could consider a flip side; here, not only do pilots and others make a salary, but they also have a title to a future salary upon their retirement, so long as the company is solvent. This is also true for cops and teachers, among others. Other people without pensions save out of their salary in preparation to provide their own income in retirement. Which these pilots may also do to provide extra security, for all I know.

But a pension is designed to be an at-risk asset that is often worth considerably more than people expected. In some scenarios, union bargaining arguably can extract higher pensions than is feasible to pay, merely because management would rather have a liquidity crisis 20 years from now, rather than a liquidity crisis right now. The ideal is to never have such a crisis, but with organized labor, they too perhaps under-value stability, preferring a higher compensation with a bit less safety. As you say, saving one's private assets is a sure way to avoid corporate solvency risks.

[Edited 2011-09-25 19:51:37]
 
ScarletHarlot
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 2:55 am

Quoting CX Flyboy (Reply 18):
it does not sound great to me

That is a pretty accurate statement about many defined benefit plans in the US. What you are describing is more of a defined contribution plan and that works the same in the States. It's known as a 401(k) plan here.

An employer funds the liabilities of a defined benefit plan over time and invests the assets. If the stock market drops, those assets are negatively impacted and the employer will likely have to invest more money than they originally planned to do. The liabilities are actuarially determined annually to see how much the plan should have set aside now to fund estimated payouts over time assuming certain asset performance.

I worked on Delta's DB plan from 2000-2004. Delta was hit by a perfect storm. Their pension plan had been pretty well funded but after 9/11 the assets tanked and so did their revenues. Delta received permission to defer payments into the plan and then when they entered bankruptcy they decided to wind up the plan. Since the assets were reduced due to market performance there were not enough assets to meet the plan's liabilities at the time of wind up and plan participants got less than they were promised.

Quoting CV880 (Reply 6):
Which was what happened on a monthly basis right before DL declared BK. DL could not afford the lump sum payouts($200-$300Mil/per month) which were due when pilots retired, so the defined pension benefit went to the PBGC in BK.

Throw qualifed (tax-sheltered) status vs. non-qualified status into the mix and things get really fun. The large lump sum payments due to Delta's pilots were non-qualified and had to be paid from general revenues, not from the pension plan, and that money had to be found quickly.

Fun fact: it was me who calculated the Delta pilots' pension benefits in late 2003 / early 2004, when such large numbers of pilots were retiring.

[Edited 2011-09-27 01:34:56 by SA7700]
But that was when I ruled the world
 
CX Flyboy
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 3:36 am

Thanks for the replies. I still think the way it is done out here is better. The company regards retirement fund payouts every month simply as part and parcel of their monthly staff salary bill. The company does not invest the money, the individual does. The company cannot be blamed for underperforming funds since it was up to the individual to choose how to invest the money. If the company goes bankrupt, the retirement money does not even factor into it, since it is already held by a third party and has nothing to do with the airline anymore. That money goes straight to the individual since it is already held in their name, just by a third party on their behalf. No chance of the pilot (or whoever) losing out.

Quoting Flighty (Reply 19):
union bargaining arguably can extract higher pensions than is feasible to pay, merely because management would rather have a liquidity crisis 20 years from now, rather than a liquidity crisis right now.

Why promise something in the beginning when you know that you will be unable to fulfil that promise?!
 
PVG
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 3:45 am

Quoting CX Flyboy (Reply 18):
I must admit to not knowing many of the details about how the retirement plans work in US airlines but it does not sound great to me. How you can see your retirement fund wiped out if the airline cannot afford it or moves it around. That would never be allowed over here. At CX every month they pay their contribution to your retirement into a separate account held and managed by a brokerage firm or bank (HSBC at the moment). That money is yours to invest as you see fit. if you leave the airline, you are entitled to walk away with that money (Since it is yours). Of course the stock market condition affects how much you make and lose on that money but instead of investing it into funds, you can keep it as pure cash. The point is that the airline has already paid it out. They no longer have anything to do with that cash once it gets paid every month and you do not get stories of pilots getting screwed when the airline runs low on cash and decides to wipe out retirement funds. How the government over there can allow this to happen is mind boggling to me. There are laws regarding things like this over here.

This is a huge problem with US accounting and pension rules. Companies are allowed to accrue their pension contributions. They don't have to actually make a contribution, they can defer the contribution and show it as a payable on their balance sheets. That is why so many people are nervous. When GM and UA declared Chap. 11, they had billions in unfunded pension contributions on their balance sheets. The pension fund then becomes another creditor (like any other creditor) with the government only guaranteeing a small portion of the actual amount owed to the employee. It is another of the great ponzi schemes that contribute to the current state of the financial mess in the US. The government and companies make all of these promises to people to get their votes and support, but no one puts aside the money to fund the promises. Then, when it is time to pay out, it's someone else's problem. It won't end until we have someone in power who is more interested in doing the right thing than getting re-elected, which is very unlikely based on what's been happening lately.
 
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b727fa
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 2:51 pm

Quoting stillageek (Reply 9):
Have Eagle pilots (all very senior CA's with 20+ years seniority at Eagle) had problems on the 80? Yes.

That's odd. I've flown with several AE pilots here at DL and they're thriving...on the MD88/90, no less.
My comments/opinions are my own and are not to be construed as the opinion(s) of my employer.
 
Flighty
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 3:13 pm

Quoting PVG (Reply 22):
It won't end until we have someone in power who is more interested in doing the right thing than getting re-elected, which is very unlikely based on what's been happening lately.

Curious what you mean by right thing. Front-funding all pensions? I totally agree there. Especially for public employees. Let's have those liabilities show up brightly on each yearly budget.

If you mean making pensions the first priority during bankruptcy, I don't agree morally with that. Nobody ever promised that. That would be a strong upgrade of pensions that wasn't even bargained for.
 
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lightsaber
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 3:40 pm

Quoting ripcordd (Reply 3):
I have heard around 200 will leave in Oct....A Big reason in the reduction in flying along with the reg fall cuts..

I honestly expect larger numbers. When AA declares BK, it will destroy the retirement for many senior pilots.   At that point AA will stop having pilots voluntarily retire for a decade.

Quoting apodino (Reply 4):
With the rumblings of Chapter 11 possibilities circling on wall street, this is only going to drive more guys to jump off the ship and lock in their retirements before the retirement benefits are dumped in Bankruptcy the way UAs was.

Its not just wall street. AA must re-organize while they have a large pile of cash. Boarders books will be the case study of how a large company entering bankruptcy sans cash is doomed.

Quoting Acey559 (Reply 16):
I received an email from the Eagle MEC and it said they have (or are in the process of) negotiating about 825 flow through positions.

Wow. Just wow. Those are more like the numbers I expected to see.

Quoting Flighty (Reply 19):

The only way to "lock in" their retirements AFAIK is a cash-out option

At today's interest rates, not cashing out is silly. Eventually interest rates will go up again.

Quoting CX Flyboy (Reply 21):
The company regards retirement fund payouts every month simply as part and parcel of their monthly staff salary bill. The company does not invest the money, the individual does.

My employer went to that style of pension. Then they decided to screw it and cut the pension for new hires.   Companies cannot afford defined benefit pensions. What you describe is a 'defined contribution pension' that should be the future. Since young workers are not even being granted pensions, there is little support of the old style pensions by the young. To them it is an unfair tax.

Lightsaber
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mcg
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 6:52 pm

So the AA pilots have the option to retire and take a one-time cash payment rather than monthly payments for the rest of their life? If that's the case I suspect a lot of older AA pilots would retire and take the money. In this way their pension would be sheltered from AA BK. Having said that, it would be interesting to understand the size of the one time payment compared to the monthly life-time pension.
 
CX Flyboy
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 11:26 pm

Quoting Flighty (Reply 24):
Curious what you mean by right thing. Front-funding all pensions? I totally agree there. Especially for public employees. Let's have those liabilities show up brightly on each yearly budget.
Quoting lightsaber (Reply 25):
My employer went to that style of pension. Then they decided to screw it and cut the pension for new hires. Companies cannot afford defined benefit pensions. What you describe is a 'defined contribution pension' that should be the future. Since young workers are not even being granted pensions, there is little support of the old style pensions by the young. To them it is an unfair tax.

This says a lot about the financial state of your company if you cannot even afford the monthly pension contributions up front. It should be regulated and mandated and if you can't afford to do it, then don't bother running the business. Whats next, no tax bills because companies can't afford it? If it can be done by other countries around the world there is ZERO excuse for it not to be done in the US.
 
flyby519
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RE: How Many Pilots Will AA Lose This Month?

Mon Sep 26, 2011 11:52 pm

Quoting Acey559 (Reply 16):
I received an email from the Eagle MEC and it said they have (or are in the process of) negotiating about 825 flow through positions. That's going to leave quite the vacancy here at Eagle if all of those pilots choose to jump ship and go to AA.

There are roughly 240 AE CAs that have seniority numbers on the AA seniority list, and will be given the opportunity to chose yes/no to flowthrough to AA when their number gets called during the recall process.

After that, AA will start hiring new pilots off the street, and in those newhire classes at least 50% of the pilots will be AE CAs until 824 AE CAs chose yes and accept the opportunity to be a newhire at AA (they dont have existing seniority numbers yet)

After THAT, they will offer everyone at Eagle a job at AA in seniority order along with newhires. At least 30% of the newhires will be from AE, and that % will bump to a minimum of 50% if AE furloughs pilots.

A lot of movement at AE is dependent upon AA starting the newhire process.

I think that when it does happen, AA/AE will modulate the shrinkage at AE and the expansion at AA to coincide so that there isnt some overly drastic sucking sound from losing too many pilots at AE.
These postings or comments are not a company-sponsored source of communication.
 
Type-Rated
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 12:13 am

Quoting mcg (Reply 26):
So the AA pilots have the option to retire and take a one-time cash payment rather than monthly payments for the rest of their life? If that's the case I suspect a lot of older AA pilots would retire and take the money. In this way their pension would be sheltered from AA BK. Having said that, it would be interesting to understand the size of the one time payment compared to the monthly life-time pension.

Yes, that's the way it works. Most retirees sit down and calculate which would give them a larger retirement, a lump sum or monthly retirement payments until they die. Thern based on those calculations they choose which would be best for them. Then you have to look at the state of your company. Will your company be around to send you those payments in say 10 years?

Most of their money is in 401K programs which can be rolled over to any financial institution they want and invested to create monthly earnings. When you do this the money is now yours and off limits to the company you work for. But you have to be very careful as this is all you got, if you don't invest it wisely you could be out on a limb with only social security as income.

I imagine some of those long term pilots with AA will walk away with between 1-3 million dollars in a lump sum payment. And no tax is due until it's withdrawn from the tax deferred section of the fund.
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PVG
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 12:33 am

Quoting Flighty (Reply 24):
Quoting PVG (Reply 22):
It won't end until we have someone in power who is more interested in doing the right thing than getting re-elected, which is very unlikely based on what's been happening lately.

Curious what you mean by right thing. Front-funding all pensions? I totally agree there. Especially for public employees. Let's have those liabilities show up brightly on each yearly budget.

If you mean making pensions the first priority during bankruptcy, I don't agree morally with that. Nobody ever promised that. That would be a strong upgrade of pensions that wasn't even bargained for.


I am definitely for pay as you go.
 
AAR90
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 2:17 am

AA pilots have both: A-Fund = defined benefit plan B-Fund = defined contribution plan For post 1983 hires, the B-Fund will average 2-3 times the benefits at retirement that the A-Fund will provide.

Quoting lightsaber (Reply 25):
When AA declares BK, it will destroy the retirement for many senior pilots.

You have obviously NOT been reading this thread.

Quoting type-rated (Reply 29):
Most of their money is in 401K programs

Not at AA. Our 401(k) plan is in addition to the two established retirement plans and any $$$ going into the $uper$aver program is an elective decision made by the pilot using HIS money, no company money is involved.

Quoting type-rated (Reply 29):
I imagine some of those long term pilots with AA will walk away with between 1-3 million dollars in a lump sum payment.

That used to be a "sure bet" without much (if any) additional contributions by the pilot; however, with the economy the way it is (has been)..............

[Edited 2011-09-27 01:36:49 by SA7700]
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xdlx
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 8:57 am

Now today ALPA sues UA on integration issues due to "training".

I hate to say I told you so......! QQQ??? Can the major airline training departments handle the industry changes?
UA/CO TRAINING DEPT obviously is going thru some growing pains......
 
flyby519
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 12:22 pm

Quoting xdlx (Reply 32):
I hate to say I told you so......! QQQ??? Can the major airline training departments handle the industry changes?
UA/CO TRAINING DEPT obviously is going thru some growing pains......

I would really like to see Part 121 training become standardized across the industry and have a 3rd party provide the service, similar to how FlightSafety does it for Corporate/Bizjet training. I'd also like to see the FAA come up with some standardized training for a fleet so that it would be easier to transition from flying a 737 at CO to flying a 737 at UA (or any other carrier that flies 737s).

It will be a huge cost for airlines in the future, and they cant keep up with the demand. Look at AA losing hundreds of CAs off the top of their seniority list. One single 777 CA retirement triggers at least 6 training events through the company.
These postings or comments are not a company-sponsored source of communication.
 
xdlx
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 2:34 pm

Quoting flyby519 (Reply 33):

Some claim the figures is 5(TNG) to 1(RET) but still .... 824 x 5 is a lot of trainning!
 
mcg
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 7:21 pm

Quoting AAR90 (Reply 31):
AA pilots have both: A-Fund = defined benefit plan B-Fund = defined contribution plan For post 1983 hires, the B-Fund will average 2-3 times the benefits at retirement that the A-Fund will provide.

Thanks for the info, how are the funds paid out? I'd assume the A fund is a traditional defined benefit plan with monthly payments to retiree's and subject to PBGC regulation. Is there a lump sum option on this fund?

For the B-fund is the payout handled by simply buying a lifetime annuity from an insurance company?

Thanks again
 
Rdh3e
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 9:38 pm

Quoting CX Flyboy (Reply 18):
At CX every month they pay their contribution to your retirement into a separate account held and managed by a brokerage firm or bank (HSBC at the moment). That money is yours to invest as you see fit. if you leave the airline, you are entitled to walk away with that money (Since it is yours)

What you're describing sounds a lot more like a 401k than a pension. At UA we get a defined percentage from the company, then the company will match your contribution up to a certain additional amount. This happens on every paycheck, and they pay the money UP FRONT to an outside financial institution. If I leave or am let go, I take that money with me, if UA goes away, I keep that money.

Quoting lightsaber (Reply 25):
Since young workers are not even being granted pensions, there is little support of the old style pensions by the young

After seeing the way so many people have gotten totally WORKED by the system of defined benefit programs, and the dog-eat-dog culture we have, younger folks have more of an attitude of "I'll look out for myself, and then if I get a little extra from the company, well that's nice." I'm of the opinion that social security will also not be around when I retire, which is essentially a defined benefit plan funded by a giant ponzi scheme.
 
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seabosdca
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 10:01 pm

Quoting rdh3e (Reply 36):
I'm of the opinion that social security will also not be around when I retire, which is essentially a defined benefit plan funded by a giant ponzi scheme.

This sort of thinking is so common and yet has little if any basis in fact. It is slightly OT but I feel a duty to provide correct information.

Without any changes, the Social Security actuaries believe the system will pay all benefits through 2037 and about three-quarters of benefits thereafter.

With any few of a huge number of potential minor changes (my favorites, which by themselves would do the trick, are eliminating the income cap for the payroll tax and changing the inflation index used to calculate COLAs), the system will be sustainable indefinitely.

If you want to talk about an entitlement program headed for inevitable doom, that would be Medicare, not Social Security.

[Edited 2011-09-27 15:02:02]
 
Rdh3e
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 10:18 pm

Quoting seabosdca (Reply 37):
This sort of thinking is so common and yet has little if any basis in fact. It is slightly OT but I feel a duty to provide correct information.

Without any changes, the Social Security actuaries believe the system will pay all benefits through 2037 and about three-quarters of benefits thereafter.

I'd say you made my point in the second part of your post. Especially since I won't be eligible for SS until after 2050 and that's at current age limits, not raised ones. I will also have paid in significantly more than I will be paid back. This is where the ponzi comes in, look at the increasing tax rates of the social security system, they started at 1% total, now they are up to over 15% (http://www.ssa.gov/oact/progdata/taxRates.html) . People who are receiving checks now probably paid less than 25% of what I will pay, and that's because the number of SS eligibles is inflating compared with the number of contributing citizens..

Back on topic. It seems to me that AA's cannibalism of Eagle for it's crews could seriously endanger the future of AE as a company. However, it could also provide a convenient avenue for the pulldown of eagle flying.

[Edited 2011-09-27 15:21:49]
 
norcal
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 10:25 pm

Quoting rdh3e (Reply 38):
Back on topic. It seems to me that AA's cannibalism of Eagle for it's crews could seriously endanger the future of AE as a company.

Why? AMR wants to diversify their feed. They can bring in other carriers to do the flying Eagle no longer can staff. Better than furloughing because you are getting rid of your most senior (expensive) labor than losing your most junior labor.

The only issue is if/when other regionals are no longer able to staff their current flying let alone any other flying AMR might try and outsource to them. Regionals are already facing major staffing issues and we haven't even hit the massive retirements from age 65 or the increase demand from new FTDT rules, and the ever decreasing supply of pilots from the 1500 hour rule and the skyrocketing costs of flight training.
 
Rdh3e
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 10:41 pm

Quoting norcal (Reply 39):
Why? AMR wants to diversify their feed. They can bring in other carriers to do the flying Eagle no longer can staff. Better than furloughing because you are getting rid of your most senior (expensive) labor than losing your most junior labor.

I think we are saying the same thing. It's going to hurt Eagle because they won't be able to staff their flying, but it's going to give AMR huge opportunity on the regional side. Also, I'm not sure, but has anyone (other than the ATA) actually looked at the current work rest rules to see which carriers aren't in compliance? I've been reading that many companies (UA and AA included) already comply with the proposed regulation and that it would mostly effect regionals, is that correct? Any idea which carriers do not comply?

[Edited 2011-09-27 15:42:07]
 
CX Flyboy
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 11:09 pm

Quoting rdh3e (Reply 36):
Quoting CX Flyboy (Reply 18):
At CX every month they pay their contribution to your retirement into a separate account held and managed by a brokerage firm or bank (HSBC at the moment). That money is yours to invest as you see fit. if you leave the airline, you are entitled to walk away with that money (Since it is yours)

What you're describing sounds a lot more like a 401k than a pension. At UA we get a defined percentage from the company, then the company will match your contribution up to a certain additional amount. This happens on every paycheck, and they pay the money UP FRONT to an outside financial institution. If I leave or am let go, I take that money with me, if UA goes away, I keep that money.

Precisely. So there are two different methods in the US of doing your retirement fund? Why isn't 401K mandated by the government for all companies?
 
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lightsaber
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 11:11 pm

Quoting flyby519 (Reply 28):
A lot of movement at AE is dependent upon AA starting the newhire process.
Quoting AAR90 (Reply 31):
You have obviously NOT been reading this thread.
Quoting AAR90 (Reply 31):
Quoting lightsaber (Reply 25):
When AA declares BK, it will destroy the retirement for many senior pilots.

78You have obviously NOT been reading this thread.

You don't think it won't impact future AA contributions? Is AA fully funded? If pilots are taking lump sums, it is draining the pension fund rapidly.

Perhaps destroy was too strong of a word, but AA's retirement contributions will be drastically less post BK. The A-fund will be handed over to the PBGC.

Look at what is happening outside aviation. Companies are not offering new hires *or* rehires a pension of any form. We're in deflation... it sucks.

Quoting rdh3e (Reply 36):
I'm of the opinion that social security will also not be around when I retire, which is essentially a defined benefit plan funded by a giant ponzi scheme.

It won't even be there when I retire. The baby boomers will destroy it. SS has also been drained using as a fund to pay for disability, which it isn't funded for.

Quoting mcg (Reply 35):
For the B-fund is the payout handled by simply buying a lifetime annuity from an insurance company?

That A-fund will be hard hit in BK. I expect, at best, it to be frozen and an immediate end to cash out payouts. Expect the B-fund contributions to be much lower, if not halted. Many fortune 500 companies have ceased adding employees to pension funds. I'm afraid AA employees are about to get a wake up call to today's expectations...

Quoting seabosdca (Reply 37):
If you want to talk about an entitlement program headed for inevitable doom, that would be Medicare, not Social Security.

Medicare will have to cut first. I was shocked how generous it was when a relative required extensive coverage. But SS will require the retirement age to be adjusted up *and* current payouts cut with today's interest rates. Probably via a reduced 'cost of living' increase.

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
AAR90
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RE: How Many Pilots Will AA Lose This Month?

Tue Sep 27, 2011 11:30 pm

Quoting mcg (Reply 35):
Thanks for the info, how are the funds paid out? I'd assume the A fund is a traditional defined benefit plan with monthly payments to retiree's and subject to PBGC regulation. Is there a lump sum option on this fund?

Yes, unlike many other airlines, AA pilots have had a 100% lump sum option with their A-fund for most of the history of this plan. The lone exception was when the B-scale [new hire salary/benefit] was created, but that was negotiated away some 20 years ago. 100% lump sum option is what every retiring AA pilot chooses.

The only pilots I have heard taking the monthly payment option were some ex-AirCal folks who --at retirement-- had very little "vested" in the A-fund... they would make more in monthly payments after ~10 years than they could investing the very small lump sum for those same ~10 years.

Quoting mcg (Reply 35):
For the B-fund is the payout handled by simply buying a lifetime annuity from an insurance company?

The B-Fund is a completely separate trust fund that is independent of company and union. AA is the fiduciary (financially liable) while the union is strictly an "advisor." The Trustee manages the fund on behalf of the individual member pilots. AA makes quarterly payments equal to a percentage of each pilots' salary for that quarter into each pilots' account within the trust... and that's it. AA's responsibility essentially ends at that point.

When an AA pilot retires, he collects both A-fund and B-fund cash (normally transferred directly to his IRA) and whatever happens with the company or union after that no longer affects his retirement. With the ability to "lock-in" a B-fund share price for 60 days, pilots can collect their B-fund retirement at either the "locked-in" price or the current (as of retirement) price. A stock market drop of 10% can make a huge difference in a pilot's B-fund retirement value that he can "protect" by retiring at the locked-in (60 day old) price. That's why we see surges of retirements whenever there are sudden/large drops in the stock markets. This is not something new and definitely not related to any potential AA bankruptcy filing.

These two plans are contractually obligated retirement plans that the individual pilot is NOT able to elect to not participate in. AA also has a 401k plan (named: $uper$aver) that pilots may also participate in; however, all money invested there are the pilots' (no company matching) and $uper$aver is available to ALL AA employees --therefore, not technically a "pilot" retirement plan, but most AA pilots also participate in $uper$aver as well.
*NO CARRIER* -- A Naval Aviator's worst nightmare!
 
moman
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RE: How Many Pilots Will AA Lose This Month?

Wed Sep 28, 2011 12:46 am

Quoting norcal (Reply 39):
The only issue is if/when other regionals are no longer able to staff their current flying let alone any other flying AMR might try and outsource to them. Regionals are already facing major staffing issues and we haven't even hit the massive retirements from age 65 or the increase demand from new FTDT rules, and the ever decreasing supply of pilots from the 1500 hour rule and the skyrocketing costs of flight training.

I thought it was kind of selfish of the senior pilots to lobby for rule changes in 2006, in effect to screw over the younger pilots. Now the crow is roosting because the younger pilots moved on to different things and the airlines are going to soon be in a world of hurt. Flight training is cost prohibitive and anyone who is serious about making some good money flying will go overseas in southeast Asia where they can't hire enough pilots today without the cyclical forces that have destroyed so many flying careers in the USA.

One thing that could help the flow is that flight schools need to start stocking basic planes - when I started 10 years ago, I could rent a Piper Tomahawk for $42/hr wet. Now, the cheapest is a Cessna 172 N model, typically beat up, for $110/hr wet. More common is the 172G for around $130/hr. I also believe Cessna is hurting themselves a bit, by signing up so many flying school as Cessna Pilot centers, the flight schools typically remove older aircraft (read: Pipers) from their fleet which again causes the hourly rental to increase.

It's going to get to the point where the major airlines will have to offer ab-initio training to candidates at subsidized rates for there to be enough aviators in the future.

Safe flying all.
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flyby519
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RE: How Many Pilots Will AA Lose This Month?

Wed Sep 28, 2011 12:50 am

Quoting moman (Reply 44):
It's going to get to the point where the major airlines will have to offer ab-initio training to candidates at subsidized rates for there to be enough aviators in the future.

Exactly, and this is already happening in many regions of the world. Im not saying it is good or bad, but it will happen here eventually. Thats why I am surprised the airlines arent pushing to get approval from the FAA for 3rd parties to do the required training.
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bearste
Posts: 13
Joined: Mon Sep 03, 2007 11:58 am

RE: How Many Pilots Will AA Lose This Month?

Wed Sep 28, 2011 1:02 am

Quoting ripcordd (Reply 8):

also a lot of the eagle pilots are not making it thru training on the S80 and they are washing back to eagle. So if this is a scare tatic this is working on getting people to retire and then they have the whole winter to train new pilots and get the flying levels back up again.

Hahahahaha

Completely and utterly false statement. First, there is no "wash-back". Second, the Eagle guys are going to a new airline, new company, new airplane, and new procedures, in a training system that hasn't handled a new-hire in 10 years. The first couple of groups had some issues with adaptation, but much smoother sailing since then.

Post the truth before hitting Enter.
 
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seabosdca
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RE: How Many Pilots Will AA Lose This Month?

Wed Sep 28, 2011 1:20 am

Quoting lightsaber (Reply 42):
But SS will require the retirement age to be adjusted up *and* current payouts cut with today's interest rates. Probably via a reduced 'cost of living' increase.

Reduce COLA slightly, yes (they add up fast!). Increase retirement age, no. SS really is not in as bad shape as people think, because they tend to think of a monolithic "SocialSecurityAndMedicare" and Medicare needs a lot of help. SS has a pig in the snake coming up in the next 20 years, but slight benefit cuts and tax increases would actually be plenty to get us through it, and could probably be undone around 2040.

Quoting lightsaber (Reply 42):
SS has also been drained using as a fund to pay for disability, which it isn't funded for.

This is a big part of the reason for the disparities rdh3e pointed out above. Still, saying "I have to pay too much for it" is completely different from saying "it will go away." One is true, the other isn't. To think SS will go away, you have to assume something truly massive will change.
 
AAR90
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RE: How Many Pilots Will AA Lose This Month?

Wed Sep 28, 2011 1:33 am

Quoting lightsaber (Reply 42):

IF AA were on the verge of a bankruptcy filing, your comments would make some sense; however, the rumors of a bankruptcy are just that... rumors. Rumors that began due to the unusually high retirements, not the other way around. Had the rumors occurred before the retirements, you might have an argument, but that is not what happened.
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mcg
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RE: How Many Pilots Will AA Lose This Month?

Wed Sep 28, 2011 2:30 pm

Quoting AAR90 (Reply 43):
When an AA pilot retires, he collects both A-fund and B-fund cash (normally transferred directly to his IRA) and whatever happens with the company or union after that no longer affects his retirement. With the ability to "lock-in" a B-fund share price for 60 days, pilots can collect their B-fund retirement at either the "locked-in" price or the current (as of retirement) price. A stock market drop of 10% can make a huge difference in a pilot's B-fund retirement value that he can "protect" by retiring at the locked-in (60 day old) price. That's why we see surges of retirements whenever there are sudden/large drops in the stock markets. This is not something new and definitely not related to any potential AA bankruptcy filing.

Thanks again, why is the B fund payout tied to AA stock price? Is the B fund invested in AA shares? Do they tie B fund balances to some sort of phantom share scheme?

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