Washington, D.C. – The “new” American Airlines is attempting to renege on the legal and binding commitment made during bankruptcy restructuring by sneaking federal legislation through Congress that would let the airline slash its pension contributions. American is going to Capitol Hill to try and secure relief from these commitments during a period of unprecedented profitability one year after exiting bankruptcy and agreeing to the pension funding terms.
But here’s the thing: American Airlines doesn’t need relief at a time when earnings are skyrocketing. Current Wall Street 2014 forecasts predict that AA will have pre-tax profits of $4.2 billion. Between 2015 and 2017, Wall Street expects AA’s pretax profits to surge to over $6 billion each year or $18 billion in total. That’s $2 billion more each year than was forecast one year ago!
In 2006, Congress granted the airlines special relief for their pension funding requirements. American, Delta and other airline pension plans were frozen during bankruptcies. Delta was allowed to use a 17-year amortization period and an interest rate of 8.85%. (Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time). American was granted a 10-year amortization period with an 8.25% interest rate. Today, American’s executives are claiming they need relief to compete with Delta. But they also state that whether this amortization period is extended or not AA will continue to fund its pension obligations and is happy to do so.
What does TWU say? If you’re happy to do so, then do it! Don’t put our members’ pensions at risk. Keep your word. Uphold the commitments you made in federal court during bankruptcy. Don’t steal our retirement when you’re making billions of dollars in revenue.
I am calling on all TWU locals, members and retirees to stand as one with our brothers and sisters at American Airlines. This union will be fighting AA’s latest attempt to slash our pension funding with every ounce of our collective strength. We need to make sure that our members can retire with dignity and enjoy the retirement that they have earned. Over the course of the next several weeks, the TWU International will be blasting out action alerts and urging members to contact their elected representatives to voice their opposition to AA’s scheme.
The International will also be disseminating information to members on our grassroots action plan, spearheaded by the TWU State Conferences and our Air Transport Division locals. The TWU International is committed to pitching the entire force of our national union against this plot to ultimately rob members of their hard-earned pensions. American Airlines, this will not fly!