Fri, Jan 20, 2012
Airline Management Says It Was The 'Appropriate Course Of
The Pension Benefit Guaranty Corporation, an agency of the
federal government, said Thursday that AMR corp is over $90 million
behind in payments to its employee pension plans.
The payment due by January 15th was some $100 million, but PBGC
says that the company had contributed just $6.5 million by the
deadline. The Wall Street Journal reports that an AMR spokeswoman
said that the company saw the move as "the appropriate course of
action" to "preserve cash."
AMR has hinted since it filed for Chapter 11 bankruptcy
protection that it might have to reduce payments to the pension
system, which the agency calculate to have total obligations of
$18.5 billion. In a statement made prior to the pension
contribution deadline, Pension Benefit Guaranty Corporation
Director Josh Gotbaum released statement criticizing AMR for its
actions. "Counsel for American claims that it needs to kill its
employees' pensions in order to be competitive with other major
carriers," he said. "The numbers tell a different story: Delta
Airlines, which reorganized in bankruptcy, pays an average of
$13,210 per employee in pension costs - almost 2/3 more than
American's pre-bankruptcy cost of $8,102.
"American has more than $4 billion in cash; some of that money
should already have been paid into its pension plans.
However, Congress, hoping to preserve plans, allowed American to
defer the payments. It would be a tragedy if American repaid
Congress's generosity by turning around and killing the plans
anyway," Gotbaum said.
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