TWU Wins Freeze of Pension Plans at American Airlines

AMR Drops Demand to Shift Pensions to U.S Gov’t Agency; Backs off Demand for Additional

Concessions in Retur Dallas — In a major development in the ongoing AMR bankruptcy case, TWU

members at American Airlines have won a freeze of current pension plans.



“The company initially wanted to terminate our pension plan, shift the cost to the government,

and put our members at risk,” said TWU International President James C. Little. “Our

negotiating team drew a line in the sand and said this was totally unacceptable – and today we

are pleased to report that AMR has informed us they are willing to accept our proposal for a

freeze of the current pension plan.”

AMR also agreed to drop its demand for an additional $600 to $800 million in concessions, which

the company claimed was the cost of a pension plan freeze.

“We would have preferred to keep the existing defined benefit plan in place,” said Little, “but

that simply was not possible.”

“We’re still discussing how to handle retirement savings going forward, as well as a very wide

range of other issues,” said Little. “We are not out of the woods, and we can’t implement the

pension plan freeze until we reach an overall agreement. But this is a very important step

forward.”

AMR had proposed terminating its pension plans for all employees, and transferring liabilities

to the U.S. Pension Benefit Guaranty Corporation (PBGC), resulting in a $10 billion deficit to

the government agency that guarantees U.S. pension plans. Some 130,000 current employees and

retirees are covered by AMR pension plans.

PGBC director Josh Gotbaum objected strongly to AMR’s plans, insisting that the company had not

proven the need to terminate the plan, and pointing out that other airlines had emerged from

bankruptcy without terminating their pension plans.

“The PBGC and Mr. Gotbaum acted very responsibly, by not letting this company shift its

liabilities onto all the other workers whose pensions are backed by the agency,” said Little.

“A pension freeze is a much better outcome.”

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