Recession Fears Spark Retirements/Cancellations At AA?
A downturn in the stock market made it appealing for 143 senior pilots at American Airlines to call it quits Thursday, according to American. The airline says the departed were watching the falling stock market and decided to lock in the value of their retirement plans by jumping ship. An AA pilot can lock part of his pension plan's value three months ahead of an announced retirement date, but can either retire or withdraw his notice at the end of that three months depending on his perception of the market. With pilots now allowed to stay on to age 65, senior pilots must weigh the value of those extra years against the value of their pension portfolios. American employs about 9,000 pilots, but in anticipation of Thursday's fallout canceled 28 flights (mostly long-haul routes flown on Boeing 777 aircraft by senior pilots) scheduled for February. The cancellations represent about one-tenth of one percent of AA's entire February schedule. The move brought some quick winter heat from the Allied Pilots Association (APA). The APA is framing American's strategy in the union's weekly newsletter as "inept decision-making in manning this airline," which it believes is understaffed. Cuts in training capacity at American may also make it slower to respond to an increased demand for pilots. APA is currently engaged in contract talks with the airline. American last year canceled more flights than any network carrier -- 2.7 percent of its schedule, according to early statistics by Flightstats.com. American Airlines officials have proposed changes to retirement plans that would dissolve some of the flexibility built into the current programs.