Allied Pilots Association Releases Statement Regarding United Airlines Pension Deferrals.

FORT WORTH, Texas -- 'Agree with Pension Benefit Guaranty Corp. that United Airlines Should Not Be Permitted to Sidestep Statutory Funding Rules'

The Allied Pilots Association (APA), collective bargaining agent for the 13,500 pilots of American Airlines (NYSE:AMR), issued the following statement in response to the decision by United Airlines' management to halt payments to employee pension plans:

"We agree with the Pension Benefit Guaranty Corp. that United Airlines management should not be permitted to sidestep statutory funding rules," said Captain Ralph Hunter, APA President. "Not funding their pension plans greatly increases the likelihood that the plans will ultimately be terminated. If that occurs, the PBGC would face an estimated liability of $6.4 billion--its biggest ever for a single company's pension plans.

"Last year American Airlines' employees agreed to significant sacrifices to enable the airline to restructure independent of Chapter 11. When we surveyed our pilots to determine how best to achieve the cost savings necessary to avert bankruptcy, the response was loud and clear: our pilots were willing to make concessions in order to preserve their pension benefits, which we knew could be at risk in bankruptcy," said Hunter. "Today, the pension plans at American Airlines are fully funded in accordance with the funding rules.

"United Airlines management needs to concentrate on determining how to exit the Chapter 11 bankruptcy process without sacrificing the hard-earned, long-promised retirement security of the airline's employees."

That is the full text of the statement.

Founded in 1963, APA is headquartered in Fort Worth, Texas.