American Airlines Group Inc., Fort Worth, Texas, expects to contribute $467 million to its pension plans in 2018, the company announced in its 10-K filed Wednesday.
Of the $467 million, $425 million is a discretionary contribution and $42 million is required. The company contributed $286 million to its pension plans in 2017.
As of Dec. 31, American Airlines had $11.4 billion in total defined benefit assets and $18.28 billion in benefit obligations for a funded status of 62.4%, up from 58.1% at the end of 2016. The 10-K did not provide a breakout of U.S. vs. international pension plans, but U.S. plan assets totaled $11.13 billion as of Sept. 30, according to Pensions & Investments data.
The discount rate used to calculate benefit obligations was 3.8% as of Dec. 31, down from 4.3% as of Dec. 31, 2016.
Also as of Dec. 31, the pension plans had an asset allocation of 63.3% equities, 23% fixed income, 13.1% alternatives, 0.4% dividend and interest receivable, and the remainder in cash and the net amount due to/from brokers for the sale of securities.
American Airlines indicated in the 10-K that temporary favorable funding rules expired at the end of 2017, and pension contributions are expected to "increase materially" starting in 2019 when fiscal year 2018 contributions are due.