'Skeptical That Stripping Employee Benefits Will Ensure
Long-Term Success'
The Allied Pilots
Association (APA), collective bargaining agent for the 13,500
pilots of American Airlines, expressed its view of the situation at
United Airlines as that carrier proceeded with plans to terminate
its four employee pension plans.
"The bankruptcy process that began in December 2002 has been
extremely difficult for the employees of United Airlines, and the
Federal Bankruptcy Court's ruling permitting that carrier's
management to proceed with terminating its employee pension plans
marks the most painful chapter yet," said APA President Captain
Ralph Hunter. "On behalf of the 13,500 pilots of American Airlines,
I want to express my heartfelt sympathy for every active and
retired employee at United Airlines affected by this terrible turn
of events."
Hunter noted that pension preservation has been one of APA's
highest priorities during the prolonged industry downturn that
began with the September 11 terrorist attacks more than three and a
half years ago.
On March 16, 2005, all
three labor unions at American Airlines -- APA, the Association of
Professional Flight Attendants and the Transport Workers Union --
joined with American Airlines management to issue a joint statement
regarding defined benefit pension plan legislation that outlines a
common position. Congress has been debating pension reform, and
legislation may emerge from the current session.
According to Hunter, American Airlines provides concrete
evidence that it's feasible to continue funding defined-benefit
plans in the current environment.
"Under the worst economic conditions in our industry's history,
American Airlines has been able to fulfill its pension funding
obligations," he said. "And as we recently reminded lawmakers on
Capitol Hill in our joint statement, we believe that companies that
have acted responsibly should be permitted to continue working
collaboratively with their employees to determine the future of
their retirement benefits, rather than Congress or the judiciary
deciding for them."
Hunter also questioned predictions that United Airlines'
decision to terminate its employee pensions could create a domino
effect at other carriers.
"We are highly
skeptical that stripping employees of their hard-earned negotiated
benefits, either through legislation or in Federal Bankruptcy
Court, will serve to ensure any organization's long-term success,"
he said. "Moreover, companies that have recently opted to replace
their defined-benefit plans with defined-contribution plans may
actually find themselves with higher pension-related expenses in
the future."
Founded in 1963, APA is headquartered in Fort Worth, Texas.
There are currently 2,890 American Airlines pilots on furlough. The
furloughs began shortly after the September 11, 2001 attacks. Also,
several hundred American Airlines pilots are on full-time military
leave of absence serving in the armed forces.