Sneak Attack on Airline retirements

[Wretched Wrench]

You need to write your congressional representative to keep this from sneaking in under the radar. As you may already know, our retirement plans are underfunded. Now they want to cook the books a little more to allow even greater underfunding. Your congressman needs to consider that the PBGC itself is already underfunded.

http://biz.yahoo.com/djus/030506/0049000026_1.html

 

[Oliver Stone''s Apprentice]

Just be sure you know what you're looking at.

So far, AA isn't involved. We got a note this morning which made it clear AA is sitting on the sidelines with this one.

ALPA is one of the groups known to be pushing for this. They're looking at it as a way of preserving existing pension plans. Had this option been available a few months back, ALPA probably would not have agreed to let US Airways terminate their pilots pension plan.

Northwest is the other proponent. Why?

Quoted from http://biz.yahoo.com/djus/030507/1521001339_1.html:

Of the top five U.S. airlines, Continental Air Lines Inc.'s plan is the most underfunded, at just 42%. The company said it plans to make a cash contribution of $90 million this year.

AMR Corp. (NYSE:AMR - News) , parent of American Airlines, is the best funded of the big airlines' pension plans. Its plan is 65% funded.

In 2002, American Airlines' pension plan had the best return on assets of any in the group. Investments for the year came close to breaking even, with a negative return of 0.3%. Northwest Airlines Corp.'s investments turned in the worst performance, down 12.5% for the year.
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Northwest's fund lost money last year, and now they need to make up the difference. They have a lot of cash right now, and don't want to give any more up than they need to.

If anything, at least we know our pensions are funded more than they are at the other airlines...

 

[Boomer]

Eoloesen,
Are you saying, as the accepted and approved Member of AA Mgt., that if such rules are adoted: AMR will adhere to the older, more conservative, requirements?

After all, Caarty said he wanted a "huggy bear" society with "shared" sacrifice. It turns out that he was dismissed because what he told other members of the BoD did not match what he actually disclosed.

 

[Oliver Stone''s Apprentice]

No, I''m saying that AA isn''t lobbying for it.

If it is adopted as law, we''d be foolish not to take advantage of preserving our cash, and over-funding when/if we''re profitable again.

 

[Winglet]

Underfund now while they make strategy to come after pensions in general. In the true spirit of "making hay while the sun shines" I predict all airline managements will come after pensions . . . and soon. Expect 401ks to be the standard pension in the future . . . . that is, except, for management.

 

[whatkindoffreshhell]

Sheesh, I posted this three days ago when it was news and nobody responded!

My mistake: using the "Just Conversation" forum that is ignored by all.

Hey folks, this is not just an AA issue. Nobody in Congress has attached their name to this bill yet. Any wonder why??

After Carty''s fiasco why are the airlines persisting in cooking the pension books?

 

[JI Guy]

Eoleson: Its disingenuous to say that "AA is sitting on the sidelines on this one"...Do they support it or not? They have taken the ultimate no lose position: dont say anything...If it passes, they will take advantage of it and if it doesnt AA can say "hey we didnt support it anyway"...Yes, didnt SUPPORT it, but was AA in OPPOSITION to it...Obviously, after the meltdown of Cartys career and absolute turmoil in labor relations last week concerning pensions, why am I not surprised AA is staying silent on this one. The fact they dont OPPOSE it speaks volumes in itself!

 

[buzzkill]

After Carty''s fiasco why are the airlines persisting in cooking the pension books?
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Who is "cooking" the pension books? Seems like an accusation that should be backed up by some proof.

 

[whatkindoffreshhell]

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On 5/8/2003 10:57:57 AM buzzkill wrote:

After Carty''s fiasco why are the airlines persisting in cooking the pension books?
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Who is "cooking" the pension books? Seems like an accusation that should be backed up by some proof.

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Okay, WSJ page three 050603. Google. Dogpile. Also I''ll bet the FASB has got an opinion. You do know the FASB of course.

Now why don''t you go and demand proof for each other accusation floating around on this board? You must be consistent, or am I just going to be a special target for you?

Listen, you obviously have expertise and/or sources. Use it.

 

[buzzkill]

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On 5/8/2003 11:49:54 AM whatkindoffreshhell wrote:

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On 5/8/2003 10:57:57 AM buzzkill wrote:

After Carty''s fiasco why are the airlines persisting in cooking the pension books?
--------------

Who is "cooking" the pension books? Seems like an accusation that should be backed up by some proof.

----------------​

Okay, WSJ page three 050603. Google. Dogpile. Also I''ll bet the FASB has got an opinion. You do know the FASB of course.

Now why don''t you go and demand proof for each other accusation floating around on this board? You must be consistent, or am I just going to be a special target for you?

Listen, you obviously have expertise and/or sources. Use it.

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I don''t subscribe to the WSJ, but the NY Times referenced a WSJ article in yesterday''s paper regarding airline pensions. Maybe the full WSJ article details the book "cooking" you referred to. The NY Times article simply lays out the fact that there is legislation that aims to allow airlines to delay contributions to underfunded pensions for nearly five years. I don''t see how that is "cooking" the books.

I don''t know a lot about FASB, but as far as I can tell, the airlines are following FASB''s accounting rules and/or seeking to legally change those rules, not "cooking" any books.

As far as demanding proof from others who make accusations on this board, give me some more time, I''ll get around to it. I''m not picking on you, so relax and don''t cry foul so easily.

Finally, I don''t have any special expertise or sources, just access to Internet search engines and a desire to form my opinions based on facts. It''s easy to throw out accusations of book "cooking". Maybe you are right, I just want to see that you made that statement based on substance.

Why are you so frustrated that you have to back up your statement? If you have the facts, just show them.

 

[Oliver Stone''s Apprentice]

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On 5/8/2003 1130 AM JI Guy wrote:

Eoleson: Its disingenuous to say that "AA is sitting on the sidelines on this one"...Do they support it or not?

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Who said that AA has to have a public opinion on every issue facing the industry?

WN has been "passionately neutral" on the Wright Amendment for decades, yet is the primary beneficiary of repealing it, as well as being the primary beneficiary of it remaining in place.

Likewise, I don''t know where AA stands on Age 60 retirement for pilots, but one can just as easily argue that they''d be a beneficiary of lifting it as you could that they''d be a beneficiary of leaving the status quo.

If the laws are changed, AA would be irresponsible for not taking advantage of the changes, because I can assure you the competition will be stretching those payments out as long as they can.

If the tax laws were changed tomorrow to allow you to pay at least half your taxes on April 15th and the remainder by October 15th with no penalties or interest, would you pay all of them on April 15th?