American to Write Down Jet Values by $713M
American wrote down the value of the planes that fly in domestic markets after reassessing a portion of its fleet for planning purposes, the airline said today in a U.S. regulatory filing. Fort Worth, Texas-based AMR didn’t say how many of its 124 Boeing 757s were covered by the charge.
American said separately that it hasn’t decided the future of its pension plans and assured workers that most of them would continue to receive benefits even if the programs are frozen or terminated in bankruptcy.
The future of AMR’s pensions has become a point of contention since the company’s Nov. 29 bankruptcy filing, with the Pension Benefit Guaranty Corp. saying about $1 billion in benefits would be lost if all four plans are terminated. The federal agency, which insures pensions, has asked the bankruptcy court to order AMR to produce financial documents related to the funds.
For workers who are vested in American’s defined-benefit pension program, more than 90 percent would see no cut in benefits accrued before the company filed for bankruptcy protection if the plans are ended and payments begin at normal retirement age, Jeff Brundage, senior vice president of human resources, said in a letter to employees.
If the plans are frozen, current accrued pension benefits wouldn’t be reduced, he said.
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