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Retirement woes for American Airlines

Monday, October 3, 2011 - 10:06am

October will be a big month for retirement at American Airlines.

On Friday, the last day of the month, 129 pilots told the Fort Worth-based airline that they are retiring as of October 1.

It's more than 11 times the normal number in a given month.

Pilots younger than 60 who consider retirement might be able to lock in the value of their pension based on stock prices going back three months.

It creates a strong incentive to retire at times when stock prices are going down.

"The down market is really taking an impact on the pilot pension values," said Scott Shankland, of the Allied Pilots Association. "The second thing is the uncertainty of the health of the American Airlines for the long term."

Even before these latest retirements, American cited the large number last month as one reason for reducing the fall schedule.

"Fuel prices are causing issues," said Rick Seaney, of FareCompare.com. "It's typically the softer season, so it's maybe a little seasonal issue, and the bottom line is the economy is not looking great right now."

A month ago, 111 pilots retired, 10 times the usual number.

The moves caused American to cancel one international flight from Los Angeles to Tokyo.

The airline also reduced the frequency of some other flights.

At Dallas/Fort Worth International Airport, the twice-per-day flight to Tokyo was reduced to two times per week.

"It causes a ripple effect through the whole pilot ranks," Shankland said. "It causes training through the entire pilot ranks, and it takes three to five months to actually recover from that manning adjustment when you have a large group of retirements."

Now with even fewer pilots, passengers may notice fewer flights and higher ticket prices.

"Sometimes what happens is because there's fewer flights, there's more demand," Seaney said. "Ticket prices get driven up just by the sheer fact that more people want some seats than that are available for them."

Late Friday afternoon, American released this statement:

"While more of our pilots than might normally be expected made the decision to retire in on October 1, we expect to operate our schedule with minimal customer inconvenience. In preparation for a higher than usual number of retirements, we've taken a number of steps to minimize any customer inconvenience. We have made a proposal to the APA that would mitigate near-term staffing shortages that is good for both the airline and our pilots. Recent schedule reductions also have allowed us to absorb a higher retirement number than our historic rate for our current schedule."

Susan Gordon, American Airlines spokeswoman

In a statement, the Allied Pilots Association said it was evaluating a relief proposal from airline management to mitigate the higher-than-normal number of retirements in September and October.
 

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