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November 26, 2012

American to begin recalling pilots in January

American Airlines said it will begin recalling furloughed pilots starting in January.

The Fort Worth-based carrier said that "due to operational needs combined with recent and expected retirements," it will recall about 40 pilots a month. Pilots were told of the recalls in a memo sent by vice president of flight, Capt. John Hale, on Wednesday evening.

American has about 650 furloughed pilots, most who were laid off in late 2001 and early 2002, when the airline downsized following the terrorist attacks. The carrier has previously said it intends to hire or recall over 2,500 pilots in the next five years.

The carrier has 491 pilots who are over 60 and will need to retire within five years when they reach the Federal Aviation Administration's mandatory retirement age of 65. American expects to create 1,500 pilot jobs and to replace 1,000 others lost through retirement and attrition.

Separately, on Friday, American filed a motion with the bankruptcy court to eliminate the lump-sum payment option in its pilot pension plan. The carrier argued that it will not be able to freeze the pension plan, as it has previously agreed to do, unless the lump sum option is removed from the plan.

"If pilots could continue to receive a lump sum upon the Debtors' emergence from chapter 11, it would fuel a massive wave of pilot retirements. These retirements would create a pilot shortage which, in turn, would result in an operational crisis involving the wholesale cancellation of flights and the grounding of airplanes, with a corresponding devastating reduction in revenue and profitability. In short, if American cannot eliminate the principal motivation for this wave of retirements and preserve its ability to meet its business plan by enacting the Amendment, it will have no choice but to terminate the Pilot Plan," the filing said.

Pilots are currently voting on a tentative agreement with American that offers pay raises and a 13.5 percent equity stake in the new carrier in exchange for more domestic code sharing and the use of more regional jets.

"We have worked collaboratively with the Allied Pilots Association, Pension Benefit Guaranty Corporation and Unsecured Creditors’ Committee to develop a solution that maintains the freeze of our pilot defined benefit plan. The motion asking the court to allow the company to remove the lump sum option and other similar forms of benefit from the plan moves us a step closer to that goal," said American spokesman Bruce Hicks.

-Andrea Ahles


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So wait take away the lump sum to force employees not to leave . why not just make the lump sum available at 65. they have to retire at 65 anyway. That is if this is really about forcing your employees to stay by holding them economically hostage till 65.

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