AMR Announces Additional $100 Million Pension Contribution

[eolesen]

FORT WORTH, Texas, Dec 12, 2006

American Airlines, Inc., a wholly owned subsidiary of AMR Corp., today announced that it has made an additional $100 million contribution to its employees' defined benefit pension plans. The contribution announced today is in addition to the $223 million that American has already contributed to satisfy minimum required pension funding obligations for 2006, bringing its total contributions to these pension plans to $323 million this year.

"This additional contribution is a strong example of our commitment as a company to invest in the future of our employees," said AMR Chairman and CEO Gerard Arpey. "It is a reflection of the progress we have made under our Turnaround Plan and a prudent use of our cash resources to meet our obligations. By continuing to work together to improve our financial results, we can strengthen our defined benefit pension plans for the future."

Arpey noted that, including the $100 million contribution announced today, American has contributed more than $1.5 billion to its defined benefit pension plans since 2002.

"Earlier this year, Congress passed -- and President Bush signed -- pension reform legislation affecting companies with defined benefit plans," added Arpey. "We still need an adjustment to the legislation's interest rate provision, as was provided to airlines that, unlike American, chose to freeze their plans, and we remain heartened that more than 75 members of Congress have pledged to continue working on this issue."

Now... if AMR were really seeking to cancel pensions in light of the comments on additional cost savings targets, why on earth would they contribute more than just the minimum contributions?????

Could it be that where pensions are concerned, that AMR has been dealing in good faith all along? Naaaaah. That is a bit of a stretch, and would poke holes in some of the conspiracy theorists tangled webs of fear, uncertainty and doubt.

 

[jimntx]

They're just lulling us into a false sense of security. Then they'll use the money in the pension plans to pay for executive bonusses. It's plain as the nose on your face.

 

[Bob Owens]

So that 100 million comes out to a whopping 2% of their cash reserves, big deal. The plan is still underfunded.

Still doesnt help us pay our current bills or guarantee that they wont stiff us in the future.

By the way those sure are some nice new first class units they've been putting in the 767s along with the nice new quilts. Sure doesnt look like hard times for AA in the cabins.

 

[TWU informer]

Well shoot, I will not be able to get all upset about the millions in executive Bonuses now they have funded our pension with $100 million.

Are we really that stupid and gullible?

That they think this will quelch any morale tank buster due to the upcoming management bonuses?

After 20+ years, I have learned to see through these well timed smoke screen press releases. Unfortunately, the union leaders and most members are still in awe of the great Wizard behind the curtain.

 

[Birdman]

AP wire on 8/17/06
Lawmakers singled out financially struggling airlines for help when drafting the new rules.

Airlines in bankruptcy proceedings that have frozen their pension plans, an act that stops participants from getting new benefits, get an extra 10 years to meet their funding obligations. That specifically helps Northwest Airlines and Delta Air Lines.

Other airlines could use those provisions if they freeze their pension plans. Two airlines with active defined-benefit plans, American Airlines and Continental Airlines Inc., nevertheless get 10 years after the new funding rules go into effect to meet their obligations, three years longer than other companies.


---------------------------------------------------------
I believe beginning in 2008 the 10 year clock begins ticking (unless they freeze pensions ??). AA will not only have to meet existing obligations but must pay over $200,000,000+ a year extra to make up the deficit. HOW??

 

[limit]

Question.
Does anyone know what is the amount that was deposited to the pension of each work group?

 

[Wretched Wrench]

Question.
Does anyone know what is the amount that was deposited to the pension of each work group?

I wonder how much the SERP got

 

[IORFA]

Probably none. It most likely was already fully funded or over funded.

 

[whlinder]

By the way those sure are some nice new first class units they've been putting in the 767s along with the nice new quilts. Sure doesnt look like hard times for AA in the cabins.

How DARE AA try to make money!

 

[Hopeful]

Let's see....AMR pays $100 million into an underfunded plan covering thousands of current and former employees. But last year AMR paid $90 million in bonus pay to the top 1000 managers....

HMMMMMMMMMMMM...yes, seems fair and noble for AMR to kick in to the fund.

 

[Oneflyer]

Let's see....AMR pays $100 million into an underfunded plan covering thousands of current and former employees. But last year AMR paid $90 million in bonus pay to the top 1000 managers....

HMMMMMMMMMMMM...yes, seems fair and noble for AMR to kick in to the fund.

More like, $1.5 billion since 2002 in cash vs. $90 million in stock options.

 

[Hopeful]

More like, $1.5 billion since 2002 in cash vs. $90 million in stock options.

Even better!

 

[Wretched Wrench]

Embracing Arpey's pronunciation of "Leading by Example", and "Shared Sacrifice", I want my pension funded at the same level as SERP.

Anything less shows us just what a liar he is.

 

[Bob Owens]

How DARE AA try to make money!

So are you saying that you have to spend money to make money?

The fact is that there was nothing wrong with the old seats and the passengers wouldnt have known the difference either way. They have no way of knowing when they buy their tickets if the plane has the new seats or the old ones.

Its just another example of management pissing away money while they are telling us we need to do more for less.

 

[flyastrojets]

Actually, I suspect they have determined that they really are losing customers to United's p.s. service, and have decided to take some action to stop it.

The passengers that are buying full fare J and F on these flights, and I do believe that there are more than a few, really do know the difference between products.

Now, having said that, please don't take this post in any way as an attempt at casting doubt on the ability of management to piss away money on a variety of things. It's just that I happen to believe that this investment is a wise one.