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And, yes, I DO take it personally: American Airlines will use its bankruptcy as a $10B bailout by kicking its pensions to taxpayers
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Thursday, December 01, 2011

American Airlines will use its bankruptcy as a $10B bailout by kicking its pensions to taxpayers

it looks like amr (parent company of american airlines) is going to use the leverage of bankruptcy to kick its pensions over to the pbgc taxpayers just like united airlines did in 2005...
Taxpayers May Have To Pay AMR Pension Bill

US firms or taxpayers could end up paying for the bankruptcy of American Airlines if the carrier abandons its pension plans as part of a restructuring drive, US pension insurers told the online edition of the Financial Times.

Taking on the airline's pension plans would widen the Pension Benefit Guaranty Corporation's (PBGC) financial deficit and could require the insurer to charge higher premiums, director Joshua Gotbaum, head of the federal agency that insures private pensions, told the newspaper.

Tom Horton, the new chief executive of American Airlines and its parent company AMR said the fact the company had filed for Chapter 11 bankruptcy protection did not mean its pension plans would definitely move to the PBGC, but he indicated it was a real possibility, according to the article.

"The pensions in particular are very expensive, it is a very big part of our cost disadvantage relative to the rest of the industry. And so, given our plans to reduce costs to a more sustainable level, we are going to have to look at those costs," he is quoted as saying.

The PBGC said on Tuesday that American's four traditional pension plans covering 130,000 workers and retirees collectively report USD$8.3 billion in assets to cover roughly USD$18.5 billion in promised benefits.

so far, i haven't seen any stories putting this in the context of a "bailout" although that's certainly what it would be...

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