AMR Corp., Fort Worth, Texas, made just $6.5 million of a $100 million required quarterly pension contribution to American Airlines' defined benefit plans that was due Jan. 15, according to the Pension Benefit Guaranty Corp.
“We think it is unfortunate because it hurts the financial condition of the plan and it weakens the retirement security of the people in the plan,” PBGC spokesman Marc Hopkins said in a telephone interview.
American filed for Chapter 11 bankruptcy protection on Nov. 29. As its largest creditor, the PBGC is aggressively resisting attempts to transfer responsibility for the DB plans to the agency, which is struggling with a record $26 billion deficit. AMR's creditors committee was scheduled to meet Thursday.
American's four defined benefit plans — for pilots, flight attendants, ground crews and mechanics — cover nearly 130,000 participants. The PBGC estimates that their total benefit liabilities equal $18.5 billion, while plans assets are only $8.3 billion.
"The company has determined this is the appropriate course of action for the quarterly contribution amount due by Jan. 15, 2012," said Sean Collins, spokesman. "This action allows the company to preserve cash."
