US: Airlines ‘flush with money’ spur pilots' quest for lost pensions

Airline pilots, still resentful over pensions yanked away in a wave of industry bankruptcies, see growing company profits as a chance to reclaim some of those lost benefits. Unions at American Airlines and Delta are studying ways to reconstitute or replace retirement plans that were scrapped or frozen during the carriers’ past financial struggles. The efforts suggest that pilots are ready to play hardball over the issue in the next round of labor talks, starting early next year at American. The three biggest US carriers have reported combined adjusted profits of about $47b over the past five years. But reviving old retirement plans would be a big new expense for the companies just as other costs, such as fuel, are rising. “This company is flush with money,” said Dan Carey, president of the Allied Pilots Association, which represents aviators at American. At the same time, “we have a high demographic of middle-age pilots and we’re approaching retirement age with insufficient pension security. This is an immediate problem.” Discussions are in early stages, and any changes would require buy-in both by union members and the companies. Most airlines now have defined-contribution retirement plans like a 401(k). Those are less expensive and less risky for companies than defined-benefit pension plans that guarantee certain payouts but can become underfunded if investments don’t keep up with obligations.<br/>