American understands the ongoing critical importance of protecting and funding employee pensions as part of their total compensation package. Beginning in 2005 and continuing through 2006, American employees demonstrated a unified front and collaborative spirit in asking Congress to pass legislation that would provide airlines with much needed relief from the near immediate and massive funding requirements. The legislation passed, improving the company’s ability to meet funding obligations and giving it added flexibility to run the business and better position it for growth.

In 2006, the company contributed $323 million to its defined benefit plans, exceeding the required minimum funding levels by more than $100 million. These contributions, along with strong investment returns, increased assets in the pension plans by $800 million to $8.5 billion at the end of 2006. These pension plans are now funded on a collective basis at 85 percent, up from 78 percent at the end of 2005.

American's consistent approach to investing, as well as its relentless focus on its pension commitment, has allowed it to maintain the defined benefit pension plans for its 133,000 participants when other competitors have frozen or eliminated this benefit. In recognition of the company’s ongoing fulfillment of employee pensions, American earned PLANSPONSOR's Corporate Plan Sponsor of the Year in March 2007.

American is encouraged by the progress it has made in boosting funding levels and is optimistic about the future of its defined benefit pension plans. The company’s goal continues to be to avoid the adverse pension outcomes suffered by other network carriers by securing its financial future. American looks forward to working with each of its unions to protect this important benefit.

Key Defined Benefit Pension Plan Facts

• In contrast to American’s pension plans which are funded collectively at approximately 85 percent, the company’s competitors only fund their defined benefit plans between 50 and 65 percent.
  
  
• Even in the quarters during which American did not earn a profit, American continued to fund its pension plans.
  
  
• Since 2002, American has contributed more than $1.5 billion to its pension plans.
  
  
• Competitors, such as United, Delta, Northwest and US Airways, have terminated or frozen their defined benefit plans.
  
  
• Low cost carriers, such as jetBlue and ATA, do not offer defined benefit plan benefits to their employees.